WALLENIUS Wilhelmsen Ocean was convicted of criminal cartel conduct in the Federal Court on Thursday (4 February) in a case prosecuted by the Commonwealth Director of Public Prosecutions. The Norway-based company was ordered to pay a fine of $24 million.
WWO was charged in August 2019 and the company pleaded guilty to the charges in June 2020. The company was convicted of one criminal charge of giving effect to cartel provisions. WWO also admitted guilt in relation to two further offences.
The Australian Competition and Consumer Commission said the conviction ends an extensive investigation into an international cartel involving several international shipping companies.
The cartel was involved in the shipping of vehicles to Australia from Asia, Europe and the US on behalf of car manufacturers between June 2011 and July 2012.
Two other international shipping companies have been convicted and fined in relation to this cartel.
In August 2017, Nippon Yusen Kabushiki Kaisha (NYK) was fined $25 million, while K-Line was fined $34.5 million in August 2019, which remains the largest criminal fine ordered under the Competition and Consumer Act.
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.
Capacity to set freight rates
Justice Wigney found 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.
Justice Wigney noted that this was the third criminal prosecution arising from a global cartel in a market of considerable economic importance for Australia.
He said, “on just about any view, this was an extremely serious offence against Australia’s laws which prohibit cartel conduct” and WWO’s conduct was covert, deliberate, systematic, and involved planning and deliberation.
He also said while the objective seriousness of WWO’s conduct was less than NYK and K-Line, unlike these other companies WWO was not entitled to any material discount for co-operation with the ACCC because it was not established that WWO had provided any assistance to the ACCC.
An end to an investigation
ACCC chair Rod Sims said the $24-million fine for WWO brings this complex international criminal cartel investigation to a successful conclusion.
“Notably, Justice Wigney emphasised that the fine imposed on WWO ‘was intended to send a powerful message to multinational corporations that conduct business in Australia: that anti-competitive conduct will not be tolerated in Australia and that they will be dealt with harshly by this Court if found to have engaged in such conduct’,” Mr Sims said.
Mr Sims went on to say the three shipping companies were the subject of the ACCC’s first criminal cartel investigations after a change in the law came into effect in July 2009, introducing criminal cartel offences. He said the total fines of $83 million reflects the seriousness of cartel offences, which damage the economy.
“The ACCC’s investigation into this cartel, which was assisted by the US Department of Justice, Federal Bureau of Investigation, 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,” Mr Sims said.
“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.
“We will continue to investigate serious cartel conduct which affects Australian businesses and consumers, no matter where in the world those involved are located or how long it takes,” Mr Sims said.
