- S. Korea’s FTC reviews punitive actions against sea carriers for price rigging.
- The FTC will convene a full session and decide on punishment level after the reviews.
South Korea’s antitrust watchdog has embarked on a process of taking punitive actions against sea shipping companies for price rigging, reports Maekyung.
Fair Trade Commission’s Notice
According to multiple industry sources on Monday, the Fair Trade Commission has recently notified major local shippers including Korea’s sea flag carrier HMM Co., Korea Marine Transport Co., and Sinokor Merchant Marine Co. about the findings about its investigation into the companies’ possible illegal price fixing.
FTC’s Investigation & Inspection
The FTC commenced the investigation three years ago immediately after timber importers in Korea raised suspicion with the watchdog over shipping price collusion, saying that the shippers in unison raised the freight charge of their Southeast Asia route in July 2018.
The FTC has carried out an on-site inspection on the shipping companies in December that year and secured clues that they were engaged in price rigging practices also in other routes. It has also expanded the scope of the investigation to include foreign shippers. It also plans to continue to look into price fixing suspicion involving other routes.
Maritime Act Conditions
The investigation has, however, met with strong backlash from shipping companies that argue “collaborative act is allowed under the marine transportation act.”
Under Article 29 of the shipping act, a shipping company is allowed to discuss with its peers about freight charge, ship allotment, cargo capacity, and other shipping conditions, and adjust conditions.
Written Statement Proof
But the FTC said shipping companies are only allowed to do so if they enter into written consultation beforehand, report an agreed action to the Ministry of Oceans and Fisheries, and do not limit parties from withdrawing from the act, accusing the shipping companies of failing to meet such conditions when they hiked the freight charge in 2018.
Review Report
The FTC will convene a full session and decide on punishment level after it reviews response statement submitted by the shipping companies on the review report.
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Source : Maekyung
