K-Line to Pay $67 Million Criminal Fine for Role in Ro-Ro Price Fixing Conspiracy

Photo credit: K-Line
Photo credit: K-Line

Japan’s Kawasaki Kisen Kaisha Ltd., aka K-Line, has agreed to plead guilty and pay a $67.7 million criminal fine for its role in a 15-year-long price fixing conspiracy involving roll-on, roll-off cargo to and from the United States, the Department of Justice announced late last week.

According to a one-count felony charge filed Friday in U.S. District Court for the District of Maryland in Baltimore, K-Line conspired to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore, the Justice Department said. K-Line participated in the conspiracy from at least as early as February 1997 until at least September 2012, according to the Justice Department.

As part of the plea agreement, which is still subject to court approval, K-Line has agreed to cooperate with the Department’s ongoing antitrust investigation.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel, including new and used cars and trucks and construction and agricultural equipment.

“Our efforts exposed a long-running global conspiracy that operated globally, affecting the shipping costs of staggering numbers of cars, into and out of the Port of Baltimore, and other ports in the United States and across the globe. [Friday’s] announcement demonstrates our continuing resolve to bring the members of this conspiracy to justice. ” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “We are continuing our efforts to ensure that both the corporations and individuals involved in this cartel are held accountable for their acts and the harm they inflicted on American consumers.”

According to the charge, K-Line and its co-conspirators conspired by agreeing on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information. The department said the companies then charged rates in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.

K-Line is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

A statement from K-Line said that Kit has fully cooperated with the DOJ throughout the course of the investigation and that it taken steps to further strengthen its compliance and training programs to ensure compliance with all applicable laws and regulations.

Friday’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.