FTC fines shipping companies $80.7 million

Korea's antitrust regulator said Tuesday it is imposing a combined fine of 96.2 billion won $80.7 million) on 23 Korean and foreign shippers for 15 years of collusion to fix freight rates.

Korea's antitrust regulator said Tuesday it is imposing a combined fine of 96.2 billion won $80.7 million) on 23 Korean and foreign shippers for 15 years of collusion to fix freight rates.

Since 2018, the Fair Trade Commission (FTC) has been looking into allegations that the country's top shipper, HMM, and 22 local and foreign shipping lines colluded to fix freight rates for Southeast Asian sea routes.

The shippers -- 12 South Korean and 11 foreign -- colluded to set the shipping costs of container cargo services 120 times between December 2003 and December 2018 in a bid to hike the minimum level of freight rates and other costs, according to the regulator.

The South Korean shippers claimed they are allowed to take collective action on freight rates and other contract conditions for transportation under the country's maritime shipping act.

But the regulator said their acts were illegal as they failed to meet certain criteria under the law.

For legitimate collective action to be recognized under the shipping act, shipping lines must report to the maritime minister within 30 days after such collective behavior. They should also adequately discuss the move with a group of freight owners prior to making a report.

Korean shipper Korea Marine Transport will be tentatively slapped with the largest fine of 29.6 billion won and HMM 3.6 billion won.

11 foreign shippers -- four companies from Taiwan, three from Singapore and four from Hong Kong -- will be fined. Singapore-based Sealand Maersk Asia Pte Ltd. is expected to face a 2.37 billion-won fine.

But the total amount of the fine was far smaller than earlier expected as the regulator decided not to impose a fine for collusion on import routes, citing its limited impact.

In May, the FTC informed the shippers in a review report that it may impose up to 800 billion won in fines for the violation of the fair trade act.