After more than four years of investigations by the ACCC, on 23 August 2019 the Commonwealth Director of Public Prosecutions (CDPP) charged Wallenius Wilhelmsen Ocean AS (WWO), a Norwegian-based global shipping company, with criminal cartel conduct.
The charge, which concerns alleged cartel conduct relating to the shipping of vehicles to Australia between June 2011 and July 2012, follows convictions against Nippon Yusen Kabushiki Kaisha (NYK) in August 2017 and Kawasaki Kisen Kaisha Ltd (K-Line) in August 2019 for cartel conduct in respect of related cartel conduct in which WWO is alleged to have been involved.
While criminal proceedings, including Commonwealth criminal proceedings, generally commence in the Local Court before being formally committed to trial, the proceedings against WWO have been commenced in the Federal Court – with the first case management hearing in the matter taking place on 29 August 2019.
In a statement, WWO affirmed that it has been fully cooperating with the ACCC in the investigation and will continue to work with court processes to bring the matter to a conclusion. The company stated: “whilst we regret that it has come to this, we are happy to see this matter now proceeding formally”.
Background: the ACCC and CDPP are making waves
This latest charge follows investigations and a string of prosecutions by the ACCC and CDPP into criminal cartel conduct. Notably, the charge relates to alleged conduct arising out of the same cartel that the ACCC has investigated in relation to the transportation of cars, trucks, and buses to Australia between 2009 and 2012.
In 2016, the ACCC launched its first prosecution of cartel conduct against NYK under section 44ZZRG of the Competition and Consumer Act 2010 (Cth). NYK pleaded guilty to the charge in July 2016 and in August 2017, the Federal Court imposed a fine of $25 million on NYK, the first ever criminal penalty for breach of a cartel offence (see our previous blog posts here and here).
In November 2016, the ACCC commenced a second set of criminal cartel proceedings against Japanese shipping company K-Line. On 5 April 2018, K-Line pleaded guilty to the charge and on 2 August 2019, the Federal Court imposed a penalty of $34.5 million on K-Line – the largest ever criminal fine imposed under the Competition and Consumer Act – for one “rolled-up” charge of giving effect to cartel provisions. The offending conduct involved a long-established agreement between K-Line and other cartel members to not alter their existing market shares of ocean shipping services or otherwise win each other’s existing business (see our previous blog posts here and here).
Investigations chartered in foreign jurisdictions
WWO (previously known as Wallenius Wilhelmsen Logistics AS (WWL)) has also been investigated and prosecuted in several overseas jurisdictions, including in the United States, Europe and South Africa.
In August 2015, WWL reached a settlement with the Competition Commission of South Africa to pay 96 million rand (approximately A$10 million) for WWL’s participation in the cartel following an investigation that commenced in September 2012.
In July 2016, WWL agreed to plead guilty and pay a US$98.9 million (approximately A$129 million) criminal fine in an antitrust investigation by US authorities into price fixing, bid rigging and other anticompetitive conduct in the global roll-on, roll-off ocean shipping industry.
In February 2018, WWL reached an industry settlement with the European Commission for breaches of European Union competition laws following an investigation that began in September 2012. WWL was ordered to pay a fine of €207 million (approximately A$325 million).
Rough seas ahead for WWO
The matter has been re-listed in the Federal Court for a sentencing hearing before Justice Wigney on 13 December 2019. The Court has made orders for the parties to file a Statement of Agreed Facts, evidence and submissions in the lead up to the sentence hearing.