JAPANESE COMPANY TO PLEAD GUILTY TO PRICE FIXING FOR SHIPPING SERVICES

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, September 26, 2014

Japanese Company Agrees to Plead Guilty to Price Fixing on Ocean Shipping Services for Cars and Trucks

Kawasaki Kisen Kaisha Ltd. (K-Line), a Japanese corporation, has agreed to plead guilty and to pay a $67.7 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers, and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, K-Line conspired to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  K-Line participated in the conspiracy from at least as early as February 1997 until at least September 2012.  K-Line has agreed to cooperate with the Department’s ongoing antitrust investigation.  The plea agreement is subject to court approval.

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 cargo include new and used cars and trucks and construction and agricultural equipment.

“Our efforts exposed a long-running global conspiracy that operated globally, affecting the shipping costs of staggering numbers of cars, into and out of the Port of Baltimore, and other ports in the United States and across the globe.  Today’s announcement demonstrates our continuing resolve to bring the members of this conspiracy to justice. ” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “We are continuing our efforts to ensure that both the corporations and individuals involved in this cartel are held accountable for their acts and the harm they inflicted on American consumers.”

According to the charge, K-Line and its co-conspirators conspired by, among other things, agreeing – during meetings and communications – on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information.  The department said the companies then charged rates in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.

K-Line is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.