CCI passed this order on the basis of available evidence which revealed that there was an agreement between NYK Line, K-Line, MOL and NMCC with the objective of enforcement of ‘Respect Rule’.
Four maritime transport companies have been penalized by the Competition Commission of India for indulging in cartelisation in the provision of maritime motor vehicle transport services to automobile Original Equipment Manufacturers (OEMs) for various trade routes.
Four companies- Nippon Yusen Kabushiki Kaisha (NYK Line), Kawasaki Kisen Kaisha Ltd. (K-Line), Mitsui O.S.K. Lines Ltd. (MOL) and Nissan Motor Car Carrier Company (NMCC)- were held guilty under the provisions of Section 3 of the Competition Act, 2002 (the Act), which prohibits anti-competitive agreements including cartels, from 2009 to 2012.
Further, 14 individuals of NYK Line, 10 individuals of K-Line, 6 individuals of MOL and 3 individuals of NMCC, were also held liable for the anti-competitive conduct of their respective companies, in terms of the provisions of Section 48 of the Act.
CCI passed this order on the basis of available evidence which revealed that there was an agreement between NYK Line, K-Line, MOL and NMCC with the objective of enforcement of ‘Respect Rule’. The four companies would avoid competition with each other and protect the business of the incumbent carrier with the respective OEM.
To achieve the said objective, the maritime transport companies resorted to multi-lateral as well as bilateral contacts/ meetings/ e-mails with each other to share commercially sensitive information which, inter alia, included freight rates.
They also aimed to preserve their position in the market and maintain or increase prices, including by resisting requests for price reduction from certain OEMs.
Amongst these four companies, NYK Line, MOL and NMCC were lesser penalty applicants before CCI. Hence the Commission gave the benefit of reduction in penalty by 100% to NYK Line and its individuals, 50% to MOL and its individuals and 30% to NMCC and its individuals.
Accordingly, the Commission directed K-Line, MOL and NMCC to pay penalties to the tune of approximately Rs 24.23 crores, Rs 10.12 crores and Rs 28.69 crores, respectively, besides passing a cease-and-desist order.
