$500 Million Fine Slapped on Car Four Carriers by EC

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A fine of €395 million has been imposed on four maritime carriers by the European Commission (EC) for violating the European Union’s (EU) antitrust rules by indulging in cartels.

What happened?

The four carriers Japanese entities Nippon Yusen Kabushiki Kaisha (NYK) and K Line Kawasaki Kisen Kaisha (K Line), as well as Norwegian / Swedish carrier WWL-EUKOR and Chilean shipping company CSAV where fined for their alleged involvement in cartels.

Cartels effect on customers

The Japanese carrier Mitsui OSK Lines (MOL) was also found guilty of being involved in the controversy. However, the EC offered full immunity to the company in exchange for revealing the existence of the cartel. The European Commision has also exempted MOL from paying a fine of €203m.

What is a cartel?

A cartel is a means by which the component prices and transports costs for cars are raised which ultimately affects the business of European consumers and affects the competitiveness of the European automotive sector.

Margrethe Vestager, EC competition policy commissioner said, “The Commission has sanctioned several companies for colluding in the maritime transport of cars and the supply of car parts. The three separate decisions taken today show that we will not tolerate anti-competitive behaviour affecting European consumers and industries”.

She further added, “By raising component prices or transport costs for cars, the cartels ultimately hurt European consumers and adversely impacted the competitiveness of the European automotive sector, which employs around 12 million people in the EU”.

Investigation findings

The EC’s investigation, which was conducted from October 2006 to September 2012, concluded that the five carriers formed a cartel to transport new cars, trucks and other large vehicles such as combine harvesters and tractors along various deep sea routes between Europe and other continents.

Prices fixed

It also revealed that the carriers’ sales managers met at each other’s respective offices, as well as in bars, restaurants and other social gatherings in order to operate the cartel.

The officials were also in touch over the phone on a regular basis, often discussing prices, allocating customers and sharing commercially sensitive information regarding charges and surcharges added to prices to compensate for currency or oil prices fluctuations, in addition to other price elements.

The cartel ran for around six years was found to affect both European car importers and final customers as imported vehicles were sold within the European Economic Area (EEA).

European vehicle manufacturers were also affected as a result of their vehicles being exported outside the EEA.

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Source: Ship Technology

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