Lines hit with collusion charges in South Korea

Date: Tuesday, January 18, 2022
Source: Splash 247

In a landmark ruling that will be watched carefully by other jurisdictions around the world, South Korean authorities today slapped fines on 23 containerlines, claiming they had been colluding together to keep rates high on certain intra-Asian tradelanes over a 15-year period.

A total of KRW96.2bn ($81m) in fines were levied against lines including HMM, Evergreen, Wan Hai, Cosco, OOCL, Heung-A, SM Line and Korea Marine Transport Co.

“We understand the shipping industry’s unique position and its significance, but there’s no change in our role to enforce laws on anti-competitive actions,” Korea Fair Trade Commission chair Joh Sung-wook said at a news briefing. “We expect the penalty to spread fair competition culture in the shipping sector as well as pave the way for its sustainable development.”

In 2003, three South Korean liners agreed to set up a minimum threshold for rates between South Korea and many Southeast Asian nations. The cartel was then joined by a host of liners, both domestic and foreign, prosecutors found.

Antitrust authorities around the world have been looking at liners carefully over the past 18 months, scrutinising the nature of global alliances and questioning whether they exert too much control on the main tradelanes.

Earlier this month the British International Freight Association called on the UK government to investigate “distorted market conditions” within the global container shipping market.

Last summer, a Pennsylvania-based home decor importer, MCS Industries., filed a complaint against carriers MSC and Cosco before the Federal Maritime Commission (FMC), claiming the lines had been “operating in tandem to exploit the Covid-19 disruption to profiteer at the expense of US consumers.”

Regulators from the US, the EU and China met in September and determined there was so far no evidence of anti-competitive behaviour in container shipping.

In the US, a bipartisan bill that passed in the House last year aims to reform US shipping laws and give the FMC far greater powers.

In 2021, container shipping recorded its greatest ever profits, while at the same time presiding over the worst schedule reliability in the history of the industry. Early indications suggest 2022 is on course to surpass last year’s record liner earnings.


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