Japanese shipping company Kawasaki Kisen Kaisha Ltd (K-Line) has been convicted of criminal cartel conduct and ordered by the Australian Federal Court to pay a fine of $34.5 million. According to the Federal Court, K-Line took part in a cartel with other shipping companies in order to fix prices on the transportation of cars, trucks, and buses to Australia between 2009 and 2012.
K-Line’s fine of $34.5 million is the largest ever criminal fine imposed under the Competition and Consumer Act. Namely, K-Line pleaded guilty on 5 April 2018, after an extensive criminal investigation by the ACCC and the laying of charges by the Commonwealth Director of Public Prosecutions (CDPP).
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The cartel operated from at least February 1997, and affected the transportation prices of cars, trucks, and buses to Australia from the US, Asia and various European countries. K-Line, and other shipping lines transported these vehicles on behalf of major car manufacturers such as Nissan, Suzuki, Honda, Toyota and Isuzu and others.
ACCC Chair Rod Sims, stated on the occassion:
Cartel conduct, such as that engaged in by K-line, not only cheats consumers and other businesses through inflated prices and costs, but also restricts healthy economic growth and discourages innovation
K-Line’s conduct was punishable by a maximum penalty of $100 million, based on 10% of K-Line’s agreed annual turnover regarding Australian business activities in the 12 months before the start of the offence.
The Court also allowed for a discount of 28% for K-Line’s early guilty plea, and for their level of assistance and cooperation. Eventually, the Court decided that without K-Line’s early guilty plea and cooperation, K-Line would have been fined $48 million.
Summarizing his judgement , Justice Wigney stated that:
The penalty imposed on K-Line should send a powerful message” and that “anti-competitive conduct will not be tolerated and will be dealt with harshly when it comes before this Court
K-Line was sentenced for one ‘rolled-up’ criminal charge of giving effect to cartel provisions.
The conviction comes after that of another cartel participant in the cartel, Nippon Yusen Kabushiki Kaisha (NYK), in August 2017. NYK was convicted of criminal cartel conduct and ordered to pay a fine of $25 million.
