Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Auto dealers allege price fixing conspiracy among foreign ocean shipping carriers, (Mar 4, 2014)

By Linda O’Brien, J.D., LL.M.

A foreign automobile shipping company engaged in deceptive business practices and anticompetitive conduct by conspiring with other foreign shipping companies to (1) fix prices for vehicles shipped on ocean vessels, (2) exclude competition by market allocation, and (3) maintain their monopoly power in the ocean shipping industry through the use of cooperative agreements, according to a complaint filed by Tennessee automobile dealers in the federal district court of Memphis, Tennessee (Gossett Motor Cars, Inc. v. Compania Sud Americana de Vapores S.A., February 28, 2014).

Gossett Motor Cars operates several automotive dealerships that purchase and sell for retail new and used various models of foreign vehicles that are transported on ocean vessels to the United States. A Chilean company, Compania Sud Americana de Vapores, S.A. (Sud Americana), provides bulk cargo transportation, including automobile shipping services, to ports in North and South America, Europe, and Asia.

The automotive industry is a large market in Tennessee, relying heavily on foreign transportation to supply vehicles for sale to consumers that are manufactured in foreign countries. The roll-on and roll-off cargo ocean shipping market—vehicles are driven onto and off ocean vessels and are not containerized during shipping—has been highly concentrated. Sud Americana and its co-conspirators comprise the vast majority of the shippers for all automobiles and trucks shipped from foreign manufacturers and transported for sale by Tennessee auto dealers, the complaint states.

Starting in at least January 2000, Sud Americana and its conspirators allegedly conspired to artificially inflate prices for ocean shipping of roll-on and roll-off automobiles and trucks by: (1) creating anticompetitive alliances, implemented artificial barriers to entry, and discussed confidential market, supply chain management, and customer negotiation information; (2) entering into illegal pricing and output agreements, agreed to simultaneous price increases, and enforced penalties for non-cooperative companies; and (3) allocating markets and refrained from competitive bidding to control the ocean shipping market.

The complaint alleges that the defendants’ control of the non-containerized cargo ocean shipping market allowed the companies to set supra-competitive prices, economically harming Tennessee automobile dealers who receive automobiles and trucks that have been shipped by the defendant and it’s co-conspirators subject to the unlawful pricing and anti-competitive agreements.

The plaintiffs assert claims for conspiracy in restraint of trade in violation of the Tennessee Trade Practices Act. The action seeks declaratory relief, treble damages, pre- and post-judgment interest, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 2:14-cv-02150.

Attorneys: William W. Heaton (Heaton and Moore, P.C.) for Gossett Motor Cars, Inc.

Companies: Gossett Motor Cars, Inc.; Compania Sud Americana de Vapores, S.A.

News: Antitrust TennesseeNews