BMW guns for shipping cartels
Companies are in the dock
LUXURY car manufacturer BMW is pursuing damages claims in South Africa against international car-shipping companies, including Japanese-based Mitsui O.S.K. Lines (MOL) and K-Line Shipping South Africa, the local subsidiary of Kawasaki Kisen Kaisha (KL), for anti-competitive practices.
The claims stem from collusive tendering, price fixing and market division in the roll-on/roll-off (Ro-Ro) in the vehicle-shipping industry, including to and from South Africa.
BMW spokesperson Diederik Reitsma confirmed that the manufacturer was going after other suppliers that engaged in collusion and other anti-competitive practices.
Reitsma said there had been a number of anti-competitive practices among automotive suppliers that resulted in fines being imposed by several competition authorities worldwide, including South Africa’s Competition Tribunal.
He said overcharging as a result of such practices typically had a detrimental effect on immediate customers, the original equipment manufacturers (OEMs), and sometimes on the end customers, the car buyers.
“BMW is actively pursuing damages claims against suppliers who have been found guilty or have pleaded guilty to competition law violations,” Reitsma said. “We have already sued several suppliers for damages and have reached settlements with many more.”
Last year, the Competition Tribunal confirmed a settlement agreement in terms of which multinational component supplier Autoliv, one of the world’s largest manufacturers of airbags, seat belts and steering wheels, agreed to pay a fine of R149.96 million for engaging in a number of prohibited anti-competitive practices.
The conduct in the Autoliv case involved tenders issued by BMW and Volkswagen for the manufacture and supply of airbags, seat belts and steering wheels.
Reitsma said that OEMs normally sourced on an international basis and cartels also typically had an international reach. He said BMW was aware of the decisions against Autoliv and other suppliers of occupant safety systems and had already raised claims against those with which BMW did business during the period.
“We are also aware of the anti-competitive practices in the ocean shipping (Ro-Ro) industry and are also pursuing claims in this case. BMW is at this point contemplating legal action in South Africa against several carriers, including MOL and K-Line,” he said.
Anthony Ndzabandzaba, appearing for the Competition Commission at the tribunal hearing for the Autoliv matter in November, said that the Autoliv case was “just the tip of the iceberg”.
“There is more that is coming. These were global tenders that had an effect in South Africa. We are all satisfied that the South African consumer has been adversely affected by this conduct, and it needs to be outed,” he said.
Norwegian-based vehicle shipping company Hoegh Autoliners Holdings is scheduled to appear before the local tribunal next week for prosecution on seven charges related to collusive tendering, price fixing and market division.
K-Line was referred by the commission to the tribunal for prosecution on 15 charges related to price fixing, market division and collusive tendering.
Japanese-based Nippon Yusen Kabushiki Kaisha (NYK) in 2015 paid a fine of R103.98m and Norwegian-based Wallenius Wilhelmsen Logistics AC (WWL) a R95.69m fine in terms of settlement agreements in the K-Line case.