By Yoon Ja-young
The Fair Trade Commission (FTC) levied a 43 billion won penalty on nine global car shipping companies for price rigging and collusion to divide the market.
According to the FTC, the nine car shipping companies colluded between August 2002 and September 2012 in global biddings offered by car manufacturers that they should "respect" existing contracts of one another so as not to compete.
The nine car shipping companies are Japan's Nippon Yusen Kabushiki Kaisha, Mitsui O.S.K. Lines, Kawasaki Kisen Kaisha, Nissan Motor Car Carrier and Eastern Car Liner, Norway's Wallenius Wilhelmsen Logistics and Hoegh Autoliners, Chile's Compania Sudamericana de Vapores S.A. and Korea's Eukor Car Carriers.
They use special carriers dedicated to cars and trucks where vehicles can directly roll on and off. The companies take over 80 percent of the market.
The manufacturers that fell victim to their collusion, meanwhile, are domestic players like GM Korea and Renault Samsung, as well as overseas manufacturers including Fiat, Volvo, BMW, Daimler, Volkswagen, Porsche, Audi, Ford, Chrysler, Hino and Toyota.
The shipping companies helped one another preserve the existing contracts by not participating in the bidding or bidding at high prices.
"The players in the shipping market have had close contact with each other, as seen in the shipping alliance or sharing of space on ships. There has been consensus among shipping service providers since last century that they would respect existing contracts and let each other continue operating their routes," an FTC official said.
The executives of the shipping companies agreed to respect each other and not invade each other's markets at a summit meeting held in August 2002, according to the official.
The FTC also found out that Nippon Yusen Kabushiki Kaisha and Israel's Zim Integrated Shipping Service colluded to fix prices for shipping Hyundai Motor cars from Korea to Israel between March 2008 and October 2011. They were the only players operating the Korea-Israel route, which made it easy for them to collude.
In 2008, they agreed to raise the shipping price by $100 per vehicle. They also agreed on the fare for Hyundai Motor's YF Sonata following its 2009 launch, as well as for the Grandeur HG launched in 2011.
For collusion and price rigging, the FTC levied 43 billion won on the nine shipping companies, including 16.9 billion won on Mitsui O.S.K. Lines and 12.8 billion won on Kawasaki Kisen Kaisha.
The antitrust agency expects the measure to increase consumer benefit as well as enhancing competitiveness of the car industry.
"It will lessen the shipping costs of cars exported through shipping service firms as well as decrease the burden on consumers by lowering shipping cost of imported cars."
The global car shipping market is estimated to be around 10.5 trillion won as of 2011, with Korea taking 2.4 trillion won of the market.
The antitrust agencies of other countries including Japan and China also penalized collusion by the car shipping companies.
The Fair Trade Commission (FTC) levied a 43 billion won penalty on nine global car shipping companies for price rigging and collusion to divide the market.
According to the FTC, the nine car shipping companies colluded between August 2002 and September 2012 in global biddings offered by car manufacturers that they should "respect" existing contracts of one another so as not to compete.
The nine car shipping companies are Japan's Nippon Yusen Kabushiki Kaisha, Mitsui O.S.K. Lines, Kawasaki Kisen Kaisha, Nissan Motor Car Carrier and Eastern Car Liner, Norway's Wallenius Wilhelmsen Logistics and Hoegh Autoliners, Chile's Compania Sudamericana de Vapores S.A. and Korea's Eukor Car Carriers.
They use special carriers dedicated to cars and trucks where vehicles can directly roll on and off. The companies take over 80 percent of the market.
The manufacturers that fell victim to their collusion, meanwhile, are domestic players like GM Korea and Renault Samsung, as well as overseas manufacturers including Fiat, Volvo, BMW, Daimler, Volkswagen, Porsche, Audi, Ford, Chrysler, Hino and Toyota.
The shipping companies helped one another preserve the existing contracts by not participating in the bidding or bidding at high prices.
"The players in the shipping market have had close contact with each other, as seen in the shipping alliance or sharing of space on ships. There has been consensus among shipping service providers since last century that they would respect existing contracts and let each other continue operating their routes," an FTC official said.
The executives of the shipping companies agreed to respect each other and not invade each other's markets at a summit meeting held in August 2002, according to the official.
The FTC also found out that Nippon Yusen Kabushiki Kaisha and Israel's Zim Integrated Shipping Service colluded to fix prices for shipping Hyundai Motor cars from Korea to Israel between March 2008 and October 2011. They were the only players operating the Korea-Israel route, which made it easy for them to collude.
In 2008, they agreed to raise the shipping price by $100 per vehicle. They also agreed on the fare for Hyundai Motor's YF Sonata following its 2009 launch, as well as for the Grandeur HG launched in 2011.
For collusion and price rigging, the FTC levied 43 billion won on the nine shipping companies, including 16.9 billion won on Mitsui O.S.K. Lines and 12.8 billion won on Kawasaki Kisen Kaisha.
The antitrust agency expects the measure to increase consumer benefit as well as enhancing competitiveness of the car industry.
"It will lessen the shipping costs of cars exported through shipping service firms as well as decrease the burden on consumers by lowering shipping cost of imported cars."
The global car shipping market is estimated to be around 10.5 trillion won as of 2011, with Korea taking 2.4 trillion won of the market.
The antitrust agencies of other countries including Japan and China also penalized collusion by the car shipping companies.
