Japanese shipping company Nippon (NYK) has been found guilty of criminal cartel conduct by the Australian Federal Court.
The vehicle shipping conglomerate has been ordered to pay a $25 million fine, the second highest penalty imposed by the Australian Competition and Consumer Commission (ACCC). It is also the first successful conviction under the ACCC’s criminal cartel provisions provided by the 2010 Competition and Consumer Act.
The ACCC’s detailed investigation charged Nippon of effectively giving cartel pay-offs in deals with other shipping companies in relation to the transportation of vehicles to Australia between 2009 and 2012.
It’s believed the cartel was in place from as far back as February 1997 and included vehicles from Nissan, Suzuki, Honda, Toyota and Mazda, transported to Australia by NYK and other shipping lines from Asia, the US and Europe.
Nippon received a 50% discount on its penalty by pleading guilty early, but could have been as high as $100 million with the maximum penalty calculated on the basis of 10% of NYK’s annual turnover.
Justice Wigney states, “The sentence imposed on NYK by the federal court sends a strong warning to the industry and the business community at large.”
“The Commonwealth Director of Public Prosecutions (CDPP) and ACCC can and will criminally prosecute cartel conduct,” Wigney adds, “It also highlights that parties who engage early and cooperate with the authorities may be shown leniency.”
“It is ultimately detrimental to Australian businesses and consumers. The penalty should send a powerful message to multinational corporations that conduct business in Australia that anti-competitive conduct will not be tolerated and will be dealt with harshly,” Wigney says.
ACCC chairman Rod Sims says it’s another show of force for the consumer, including Australian dealers.
“The Australian community relies heavily on imported vehicles, so a longstanding cartel in relation to the transportation of those vehicles to Australia was of significant concern,” he says.
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