IN THE largest criminal fine ever imposed under the Competition and Consumer Act, Japanese shipping company K-Line has been hit with a $34.5m fine for criminal cartel conduct.

The Federal Court ruled on 2 August that Kawasaki Kisen Kaisha (K-Line) engaged in price fixing as part of an illegal cartel with other shipping companies for the transportation of cars into Australia between 2009 and 2012. This involved some 106,247 new cars being transported to Australia from the United States, Asia and Europe.

“This decision is a serious warning to businesses and will deter others seeking to join or start a cartel,” Australian Competition and Consumer Commission chairman Rod Sims said.

“The penalty imposed on K-Line 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,” Federal Court judge Michael Wigney wrote in his judgment.

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K-Line faced a maximum fine of $100m but the Federal Court reduced the penalty because the shipping company pleaded guilty early and was cooperative.

Judge Wigney wrote that the cartel conduct of K-Line is “inimical to and destructive of the competition that underpins Australia’s free market economy”.

“It is ultimately detrimental to, or at least likely to be detrimental to, Australian businesses and consumers,” he said.

Mr Sims said that cartel conduct cheats consumers and other businesses through inflating prices and costs but also restricts healthy economic growth and discourages innovation.

The ACCC is still investigating other alleged cartel members.

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