Regulatory Ambiguity In Maritime Antitrust Laws

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Over 20 liner operators are embroiled in a legal dispute with the Korea Fair Trade Commission (KFTC) following fines imposed in 2022 for alleged conspiracy to fix South Korea-South-east Asia trade lanes. This dispute underscores the complexity of regulatory oversight in the maritime industry and the challenges shipping companies face in navigating antitrust regulations.

Legal Battle Unfolds

The liner operators, including prominent names such as Evergreen, Cosco, Maersk Sealand, Yang Ming, HMM, and SM Line, have initiated individual lawsuits against the KFTC’s fine. The fines, totalling $81 million, stemmed from allegations of simultaneous freight rate increases between 2003 and 2018, following complaints from timber traders.

Regulatory Ambiguity

The KFTC’s investigation revealed a discrepancy between the Shipping Act, which permits joint actions by operators, and the Fair Trade Act, which does not exempt such actions. Despite efforts by the Ministry of Oceans and Fisheries (MOF) to exempt joint actions during the investigation, the exemption was deemed non-retroactive by the KFTC.

Legal Victories and Ongoing Appeals

In a significant development, the Seoul High Court reversed the $2.72 million fine imposed on Evergreen, signalling a potentially favourable outcome for other operators. This decision was hailed as a victory by the South Korean shipping industry. However, the KFTC has appealed the fine reversal, indicating a protracted legal process ahead for all involved parties.

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Source: The Loadstar

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