India fines Japanese car carrier operators over cartel claims

Four Japanese marine transport businesses have been sanctioned by India for price-fixing tactics in the automobile carrier industry. The Competition Commission of India (CCI) issued a final order on January 24, 2022, against Nippon Yusen Kabushiki Kaisha (NYK Line), Kawasaki Kisen Kaisha (K-Line), Mitsui O.S.K. Lines (MOL), and Nissan Motor Carrier Company (NMCC).

The four firms were punished for “cartelization in the supply of marine motor vehicle transport services to automobile original equipment manufacturers (OEMs) for various trade routes.” According to the commission, among the four firms, NYK Line, MOL, and NMCC were the lower penalty petitioners before CCI.

The companies were found to have violated India’s Competition Act, which forbids anti-competitive agreements. The Competition Commission of India (CCI) issued a total punishment of approximately $8.5 million, as well as holding company leaders accountable for anti-competitive behavior and issuing a cease-and-desist order against the unlawful cartel.

According to the commission, the four automobile carrier service providers “resorted to multilateral as well as bilateral contacts, meetings, and e-mails with each other to discuss commercially sensitive information.” They communicated freight pricing information on a regular basis. “They also attempted to retain or improve their market position and pricing, notably by opposing price reduction demands from particular OEMs.”

Fines after reduction

Each of the enterprises has now applied to the CCI for a reduction in fines. The greatest penalties, totaling roughly $3.84 million, was issued on Nissan Motor Carrier Company and its workers, after being reduced by 30%. The fine imposed against K-Line and its employees is approximately $3.24 million, while MOL and its employees were fined approximately $1.35 million after a 50 percent reduction. On review, the ICC decided to reduce by 100 percent the fine against NYK and its employees. The companies were also ordered to stop any cartel actions and not peruse agreements in the future.

It is not the first time that automobile carriers have been discovered to have engaged in cartel behavior. NYK pleaded guilty in Australia in 2016 to illegal cartel behavior involving the export of automobiles. In the long-running Australian case, K-Line pleaded guilty to illegal cartel behavior in 2018, and Wallenius Wilhelmsen in 2020. MOL was included in the Australian case which was also said to revolve around a similar “rule of respect.”

In 2017, the South Korean Fair Trade Commission identified that numerous organizations, including MOL, NYK, K-Line, Nissan Motor Carrier, Hoegh, Wilhelmsen, and others, had violated South Korean antitrust legislation for automobile carrier services. The FTC penalized nine firms over $37 million, however, MOL and Nissan Motor Carrier Co. were granted leniency and were not penalized.