shippers-price fixing

15 shippers fined 80 bln won for collusion on freight rates

SEJONG, June 9 (Yonhap) -- South Korea's antitrust regulator said Thursday it has decided to impose a combined fine of 80 billion won (US$63.6 million) on 15 local and foreign shippers for their 17-year-long collusion to fix freight rates for South Korea-Japan routes.

The country's top shipper HMM Co., 13 other Korean shippers and one foreign firm colluded to fix the shipping costs of container cargo services 76 times between February 2003 and May 2019, according to the Fair Trade Commission (FTC).

In a separate decision, the FTC will also order 27 domestic and foreign shipping lines to stop their 17-year-long price-fixing practice for South Korea-China routes, though it said it will not levy fines on them.

The shippers -- 16 South Korean and 11 foreign -- allegedly colluded to set freight rates 68 times between January 2002 and December 2018, according to the regulator.

The FTC said it has decided not to fine them as their collusion was judged to have limited impacts on hampering competition, given that supply of cargo transport and other details were already pre-determined through maritime talks between South Korea and China.

The latest punitive actions came about five months after the FTC fined 22 Korean and foreign shippers 96.2 billion won for fixing freight rates for South Korea-Southeast Asian routes.

"The moves will help pave the way for ending shippers' price-fixing practices that were made illegally beyond the legally permitted scope," the regulator said.

The South Korean shippers have claimed they are allowed to take collective actions on freight rates and other contract conditions for transportation under the country's maritime shipping act.

But the FTC said their acts were "illegal" as they failed to meet certain criteria that are permissible under the law.

The FTC has been at odds with shipping firms and the oceans ministry over its handling of the collusion case for Southeast Asian routes.

The regulator said it will closely cooperate with the oceans ministry to improve the related system over shippers' collective actions in an effort to prevent trading firms from sustaining financial damage.

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