• News

NYK cops plea in price fixing case

Written by Nick Blenkey
image description

DECEMBER 30, 2014 — Japan’s Nippon Yusen Kabushiki Kaisha (NYK) has agreed to plead guilty and to pay a $59.4 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 yesterday in U.S. District Court for the District of Maryland in Baltimore, NYK 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.  

NYK participated in the conspiracy from at least February 1997 until at least September 2012.  NYK has agreed to cooperate with the Department’s ongoing antitrust investigation.  

The plea agreement is subject to court approval. NYK is the third company to agree to plead guilty in this investigation, bringing the total agreed-upon fines to over $135 million.

“This is another step in the effort to restore competition in the ocean shipping industry to the benefit of U.S. consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Including today’s charges, three companies have now agreed to plead guilty to participating in this long-running conspiracy.  We are not done.  Our investigation is ongoing.”

According to the charge, NYK and its co-conspirators conspired by agreeing on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information.  The department said the companies then charged fees 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.

NYK 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.

Yesterday’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.

NYK issued the following statement:

On December 29th 2014 (U.S. time), Nippon Yusen Kabushiki Kaisha (here after, NYK) entered into a plea agreement with the United States Department of Justice (“DOJ”), agreeing to pay a fine of US$59.4 million (equivalent to 7,023 million yen) based on charges that it violated U.S. anti-trust laws in connection with ocean shipping services for cars and trucks.

NYK and its subsidiaries have been fully cooperating with the DOJ’s investigation since it commenced in September 2012. NYK made this decision after careful consideration of the facts and the applicable laws.

The agreement requires that NYK and its subsidiaries will continue to cooperate fully with the investigation.

NYK will record above amount as an extraordinary loss in the third quarter of the consolidated cumulative term of the fiscal year ending March 2015. With consideration of the extraordinary gain disclosed on December 19th 2014 due to the sale of some of our shares of a US-based subsidiary that operates container terminals, and the extraordinary loss which will be recorded by this matter, several rationalization costs and so on, the consolidated net income of the fiscal year will most likely not be below the figure which NYK assessed and disclosed in a previous statement. NYK is currently making calculations to determine a detailed figure in respect of the full-year financial forecast. NYK will promptly disclose such
figure when it becomes final.

NYK has been committed to complying with the spirit of laws and regulations of Japan and all other jurisdictions. Nevertheless, NYK wishes to express its sincere regret to shareholders, customers and all relevant personnel for the concern caused by this matter. NYK will continue to make a best effort to prevent recurrence and to recover trust as a company.


Categories: News Tags: , ,

Leave a Reply