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EU fines Atlantic ship lines
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September 16, 1998: 9:55 a.m. ET
Competition watchdog sets record $314M penalty on price-fixing charge
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NEW YORK (CNNfn) - Europe's competition watchdog Wednesday fined a group of shipping companies a record $314 million for fixing prices on the Atlantic.
In levying the fine, the European Commission said the 15 ship lines "have abused their joint dominant position by restricting the availability of individual service contracts and by actively discouraging independent market entry by potential competitors."
The 273 million ecu penalty is the largest fine imposed by the commission on a cartel. The previous record was a 248 million ecu fine assessed on a group of cement producers in 1994.
Shipping companies historically set prices together through cartels known as conferences. Such operations generally have enjoyed exemptions from North American and European antitrust laws.
But the European Commission believes the Trans Atlantic Conference Agreement goes beyond the role of the traditional shipping conference.
Like traditional conferences the group, which took over price-setting operations on the Atlantic in 1994, sets prices for ocean moves. But it also sets prices for moving goods inland by truck or train and decides how much member ship lines should pay freight forwarders that bring them traffic. The conference also tightly controls the contracts members make with importers and exporters.
The members of the shipping conference include Britain's P&O Nedlloyd and Atlantic Container Line; Denmark's Maersk Line; the U.S. ship line Sea-Land Service Inc.; Orient Overseas Container Line of Hong Kong; Japan's Nippon Yusen Kaisha: South Korea's Hanjin Shipping Co., Hyundai Merchant Marine, and Cho Yang Line; Mediterranean Shipping Line of Switzerland; Polish Ocean Lines; Neptune Orient Lines of Singapore; Mexico's Transportacion Maritima Mexicana; and Germany's Hapag-Lloyd and DSR Senator Line.
Sea-Land is a subsidiary of CSX Corp. (CSX), which closed up ¾ at 41-11/16 Tuesday.
The ship line group, estimated to control more than 60 percent of the traffic crossing the Atlantic, has said it will fight any European Commission action in court. Officials weren't immediately available for comment.
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