CDPP v Kawasaki Kisen Kaisha Ltd [2019] FCA 1170: Shipping Company Convicted of Cartel Conduct

Friday 23 August 2019 @ 2.04 p.m. | Legal Research | Trade & Commerce

In the case of CDPP v Kawasaki Kisen Kaisha Ltd [2019] FCA 1170 (2 August 2019), the Federal Court of Australia has found Japanese shipping company Kawasaki Kisen Kaisha Ltd (“K-Line”) guilty of cartel conduct, and has imposed a fine of $34.5 million. It is understood the fine is the largest ever criminal fine imposed under the Competition and Consumer Act 2010 (Cth).

K-Line is based in Tokyo and supplies global shipping services, including the roll-on, roll-off shipment of motor vehicles, trucks, buses, commercial vehicles, agricultural equipment and construction equipment, including on routes to and from Australia.


A media release from the Australian Competition and Consumer Commission (“ACCC”) states:

“… K-Line engaged in a cartel with other shipping companies in order to fix prices on the transportation of cars, trucks, and buses to Australia between 2009 and 2012.”

Following an extensive criminal investigation by the ACCC and the laying of charges by the Commonwealth Director of Public Prosecutions (“CDPP”), K-Line subsequently pleaded guilty to the charges on 5 April 2018.

The cartel provisions to which K-Line was a party related to the supply of shipping services to 11 major vehicle manufacturers as well as five shipping routes for vehicles to Australia, being routes from India, Thailand, Japan, Indonesia and South Korea. The cartel provisions covered the contract years 2010 to 2012.

Comment and Reaction from the ACCC

On publication of the judgment, ACCC Chair Rod Sims commented:

“We welcome the Court’s decision and the significant penalty imposed on K-Line. Cartel conduct, such as that engaged in by K-line, not only cheats consumers and other businesses through inflated prices and costs, but also restricts healthy economic growth and discourages innovation. This decision is a serious warning to businesses and will deter others seeking to join or start a cartel. Businesses should know that engaging in cartel conduct will result in ACCC scrutiny and result in potentially very serious consequences.”

Determining the Penalty

K-Line’s conduct was punishable by a maximum penalty of $100 million, based on 10 percent of K-Line’s agreed annual turnover relating to Australian business activities in the 12 months prior to the commencement of the offence.

In arriving at the penalty, the Court allowed for a discount of 28 percent for K-Line’s early guilty plea, and for their level of assistance and co-operation. The Court considered these elements as signs of contrition, with Wigney J noting [paras 411-412]:

“… The mitigating factors include K-Line’s contrition and rehabilitation, including the steps taken by it to change its corporate culture to prevent any reoffending … the appropriate sentence in all the circumstances is a fine of $34.5 million. That fine incorporates a global discount of just over 28% for K-Line’s early plea of guilty and assistance and cooperation, together with the contrition inherent in the early plea and cooperation: meaning that but for the early plea and past cooperation, the fine would have been $48 million.”

K-Line was sentenced for one rolled-up criminal charge (a “rolled-up” charge is where more than one offence forms part of the charge) of giving effect to cartel provisions.

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Commonwealth Director of Public Prosecutions v Kawasaki Kisen Kaisha Ltd [2019] FCA 1170 (2 August 2019)

K-Line convicted of criminal cartel conduct and fined $34.5 million – ACCC Media Release (2 August 2019)

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