News / Box lines in legal battle with South Korea’s antitrust body over fines

© Peter Moulton

More than 20 liner operators look set for a protracted legal battle with the Korea Fair Trade Commission (KFTC).

They have filed individual lawsuits with the Seoul High Court, challenging a fine imposed in 2022 for colluding to fix South Korea-South-east Asia tradelanes.

In January 2022, 23 liner operators, including 14 South Korean operators and others including Evergreen, Cosco, Maersk Sealand, Yang Ming, HMM and SM Line, were fined a total of $81m.

The KFTC investigated complaints, from timber traders in July 2018, that the operators simultaneously increased their freight rates between 2003 and 2018. While the Shipping Act permits such joint actions, these were not exempted by the Fair Trade Act.

As a result, the Ministry of Oceans and Fisheries (MOF) had moved to exempt joint actions from the Fair Trade Act during the investigation. However, the exemption came too late and the KFTC said it could not be retroactive.

The fine brought backlash from the MOF, Korea Shipowners’ Association (KSA) and the Chinese government.

On 1 February, the Seoul High Court, which had heard Evergreen’s suit first, reversed the $2.72m fine levied against Evergreen.

That outcome bodes well for the suits filed by the other operators and it was hailed as a victory by the South Korean shipping industry.

KSA EVP Yang Chang-ho said: “The South Korean shipping industry has been carrying out joint acts without any violations for the past 40 years, in accordance with the Shipping Act, but the Fair Trade Commission mistakenly judged it to be an unfair joint act just because of procedural flaws.”

However, the KFTC has appealed the fine reversal decision, meaning that the matter will drag on.

The KFTC said: “The judgment of the Seoul High Court is limited to Evergreen, not the judgment against the container carriers that engaged in joint acts.”

Sinokor and KMTC Line are scheduled to have their suits heard in June.