Antitrust Law Daily Wrap Up, ANTITRUST NEWS: First guilty plea entered in U.S. investigation of international ocean shipping services, (Feb 27, 2014)

By Jeffrey May, J.D.

A Chilean shipping company is the first company to plead guilty to a one-count felony charge resulting from a Department of Justice Antitrust Division investigation into anticompetitive conduct involving international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks. Today, the Justice Department announced that Compañía Sud Americana de Vapores S.A. (CSAV) agreed to plead guilty and to pay an $8.9 million criminal fine for its involvement in a decade-long conspiracy to fix prices, allocate customers, and rig bids for such services (U.S. v. Compañía Sud Americana de Vapores S.A., Criminal No. Case 1:14-cr-00100-GLR).

According to the charge, filed today in the federal district court in Baltimore, CSAV conspired to allocate customers and routes, rig bids, and fix prices for the sale of international, “roll-on, roll-off cargo” ocean shipping services to U.S. ports, including the Port of Baltimore. Examples of this cargo include new and used cars and trucks, as well as construction, mining, and agricultural equipment.

As part of its plea agreement, CSAV has agreed to cooperate with the Justice Department’s ongoing antitrust investigation. The plea agreement is subject to court approval.

“Because of the growth in the automobile ocean shipping industry over the past 40 years, the conspiracy substantially affected interstate and foreign commerce,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice Antitrust Division. “Prosecuting international price-fixing conspiracies remains a top priority for the division.”

Coastal water freight transportation conspiracy. According to the filing against CSAV, the charge is limited to deep-sea or trans-ocean transportation and did not include coastal water freight transportation between the states and territories of the United States. In 2011 and 2012, the Department of Justice charged Horizon Lines LLC, Sea Star Line LLC, and Crowley Liner Services Inc., as well as a number of former shipping executives, with participating in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico. The companies and most of the executives pleaded guilty to the charges. Sea Star’s former president Frank Peake was convicted in 2013 by a jury in the federal district court for the District of Puerto Rico and sentenced to serve five years in prison and to pay a $25,000 criminal fine.

Companies: Compañía Sud Americana de Vapores S.A.

News: Antitrust AntitrustDivisionNews