Association to Review Litigation Immediately Upon Receipt of Resolution
"Shipping Companies' Joint Actions Proceeding Lawfully"
Chairman Jo Sung-wook of the Korea Fair Trade Commission attended the National Assembly's Public Administration and Security Committee's audit of the Fair Trade Commission held at the National Assembly on the 5th and is reporting on the work./Photo by Yoon Dong-joo doso7@
The Fair Trade Commission imposed fines totaling around 100 billion won on 23 domestic and international shipping companies for colluding on maritime freight rates, prompting a strong backlash from the shipping industry, which is prepared to take legal action. The industry argues that under the Shipping Act, joint activities such as agreements on freight rates and transportation conditions among shipping companies are permissible, making the Fair Trade Commission's fines unjust.
According to the industry on the 19th, the Korea Shipping Association is reviewing specific litigation schedules with the shipping companies regarding the Fair Trade Commission's recent fine decision. It is reported that they are actively discussing filing a lawsuit immediately upon receiving the resolution document from the Fair Trade Commission.
Previously, the Fair Trade Commission fined 96.2 billion won, stating that 23 domestic and foreign shipping companies colluded on container ship rates 120 times through 541 meetings over 15 years from 2003 to 2018, mainly on Southeast Asia routes. The sanctioned domestic companies include HMM, Korea Marine Transport, and Janggeum Shipping, among 12 others, and foreign companies such as Maersk, Yang Ming, and Evergreen, totaling 11.
The core issue in this case is whether the joint activities such as freight rate consultations among shipping companies met the legal requirements under the Shipping Act. Article 29, Paragraph 1 of the Shipping Act recognizes contracts or joint activities concerning transportation conditions among liner shipping companies to enhance the competitiveness of domestic shipping companies.
However, the Fair Trade Commission claims that to be exempt from collusion charges, shipping companies must notify the Minister of Oceans and Fisheries within 30 days of any changes to the joint activities, but they failed to comply with this consultation requirement, causing direct harm to their trading partners, the cargo owners.
The Korea Shipping Association emphasized, "We have lawfully conducted joint activities under the guidance and supervision of the Ministry of Oceans and Fisheries." Cho Bong-gi, Executive Director of the Shipping Association, raised his voice, saying, "They are nullifying the entire system over procedural shortcomings. Administrative litigation is inevitable." The shipping industry explained that without joint responses on freight rates, there is a risk of falling into a chicken game similar to a decade ago due to low-price offensives by global shipping companies like Maersk.
The Ministry of Oceans and Fisheries also expressed regret over the Fair Trade Commission's fine decision, stating that the shipping companies' rate consultation process has been lawfully conducted without issues. Apart from administrative litigation against the fines, the industry plans to actively discuss a revision to the Shipping Act with the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee to ensure that joint activities under the Shipping Act are exempt from the Fair Trade Act.
An industry official said, "The fines imposed on domestic and international shipping companies effectively acknowledge the crime of collusion," expressing concern that "this is not just about the amount of the fines but could provide a pretext for global companies to bypass Korean shipping companies, worsening relations."
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