Norwegian-based Wallenius Wilhelmsen Ocean AS (WWO) has been convicted of criminal cartel conduct and ordered by Australia’s Federal Court to pay a fine of AUD 24 million (about US$18.5 million) in a case prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).
The Australian Consumer and Competition Commission (ACCC) says the conviction brings to a close an extensive investigation into an international cartel involving several international shipping companies in relation to the shipping of vehicles to Australia from Asia, Europe and the U.S. on behalf of major auto manufacturers.
In Australia, three international shipping companies have been convicted and fined a total of AUD 83.5 million in relation to this cartel, after detailed investigations by the ACCC. In August 2017, Nippon Yusen Kabushiki Kaisha (NYK) was fined AUD 25 million, while K-Line was fined AUD 34.5 million in August 2019. The K-Line fine is the largest criminal fine ever ordered under Australia’s Competition and Consumer Act.
The ACCC reports that the Federal Court found WWO had engaged in a cartel with the other shipping companies in relation to the transportation of vehicles such as cars, trucks and buses to Australia between June 2011 and July 2012.
WWO along with other multinational shipping companies gave effect to a cartel provision by allocating major vehicle manufacturing customers between themselves including on certain shipping routes to Australia. The judge, the Hon. Michael Andrew WIgney, found that this cartel had the capacity to limit or distort the competitive setting of freight rates and was likely, or at least had the potential, to impact on the prices paid by Australian consumers.
WWO pleaded guilty on June 18, 2020, and was convicted and sentenced yesterday afternoon for one criminal charge of giving effect to cartel provisions.
WWO also admitted guilt in relation to two further offenses of giving effect to cartel provisions in 2009 which was taken into account on sentence.
Justice Wigney said that while the objective seriousness of WWO’s conduct was less than NYK and K-Line, unlike those companies. WWO was not entitled to any material discount for cooperation with the ACCC because it was not established that WWO had provided any assistance to the ACCC.
“The ACCC’s investigation into this cartel, which was assisted by the U.S. Department of Justice, Federal Bureau of Investigation (FBI), the Japan Fair Trade Commission and the European Commission, shows our commitment to tackling criminal cartels and the value of strong networks between competition agencies worldwide,” said ACC Chair Rod Sims. “International cartel investigations can be challenging and complicated because parties, witnesses and other evidence are located overseas. We are grateful for the excellent cooperation with our international counterparts.”