On August 3rd the Federal Court convicted Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) of criminal cartel conduct and ordered it to pay a fine of $25 million – the second-highest imposed in ACCC history. The judgment also marks the first successful prosecution under the criminal cartel provisions of the Competition and Consumer Act 2010 (CCA).
The Commonwealth Director of Public Prosecutions (CDPP) charged NYK with giving effect to cartel provisions in an arrangement or understanding with other shipping lines relating to the transportation of motor vehicles to Australia between 2009 and 2012. It involved vehicles shipped from locations in Asia, the US and Europe on behalf of major car manufacturers including Nissan, Suzuki, Honda, Toyota and Mazda. The court found that it is ultimately detrimental to, or at least likely to be detrimental to, Australian businesses and consumers.
Justice Wigney said the fine incorporated a global discount of 50% for NYK’s early plea of guilty and past and future assistance and cooperation, together with the contrition inherent in the early plea and cooperation - otherwise the fine would have been $50 million. In this case, the maximum penalty was calculated on the basis of 10% of NYK’s annual turnover in connection with Australia, in the 12 months prior to the commencement of the offence. On that basis, NYK’s conduct attracted a maximum penalty of $100 million.
NYK’s conviction sends a strong warning to the industry and the business community at large. It tells multinational corporations who conduct business in Australia that anti-competitive conduct will not be tolerated and will be dealt with harshly.
Furthermore the CDPP has laid charges against another alleged participant in the cartel, Kawasaki Kisen Kaisha (K-Line), also a Japanese shipping company. The ACCC’s investigation in relation to other alleged cartel participants is continuing.
