Antitrust Law Daily Wrap Up, ANTITRUST NEWS: K-Line employee charged in ocean shipping conspiracy, (Dec 29, 2014)

By Jeffrey May, J.D.

A manager in the car carrier division of Japanese shipping company Kawasaki Kisen Kaisha Ltd. (K-Line) has agreed to plead guilty for his role in a conspiracy to fix prices, allocate customers, and rig bids of “international ocean shipping services for roll-on, roll-off cargo.” A one-count felony charge was filed in the federal district court in Baltimore against Hiroshige Tanioka on December 23 (U.S. v. Tanioka, Case 1:14-cr-00610-GLR).

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel. Examples of this type of cargo include new and used cars and trucks and construction and agricultural equipment.

K-Line, one of Japan’s largest transportation companies, has already pleaded guilty to a similar charge. K-Line participated in the conspiracy from February 1997 until approximately September 2012. According to the latest charge, Tanioka was involved in the conspiracy from April 1998 until about April 2012.

In November, K-Line was sentenced to pay a $67.7 million criminal fine. Under the plea agreement, K-Line agreed to cooperate with the Justice Department’s ongoing antitrust investigation.

The Department of Justice Antitrust Division announced its first charge in the ocean shipping probe in February 2014. Chilean shipping company Compañía Sud Americana de Vapores S.A. agreed to plead guilty and to pay an $8.9 million fine for its involvement in a decade-long conspiracy to fix prices, allocate customers, and rig bids for such services.

In a March 2014 announcement, the Japan Fair Trade Commission (JFTC) said that it had fined K-Line, as well as Nippon Yusen Kabushiki Kaisha, Wallenius Wilhelmsen Logistics, AS, and Nissan Motor Car Carrier Co., Ltd. a total of more than 22.7 billion yen (approximately U.S. $221.7 million) for conspiring to fix freight rates for international ocean shipping services for automobiles. The JFTC also issued cease and desist orders requiring the companies to refrain from the challenged conduct. The conspiracy was alleged to have taken place from around January 2008 until September 2012.

In addition to the government enforcement actions, the shipping services companies have been named in a number of private class action suits. The Judicial Panel on Multidistrict Litigation has centralized a number of these actions in the federal district court in Newark, New Jersey, for pretrial proceedings.

Companies: Companies: Kawasaki Kisen Kaisha, Ltd.; Nippon Yusen Kabushiki Kaisha; Mitsui O.S.K. Lines, Ltd.; Wallenius Wilhelsen Logistics AS; Compania Sud Americana De Vapores S.A.; Nissan Motor Car Carrier Co., Ltd.

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