Giant global shipping lines ran a cartel for importing cars into Australia in a "deliberate, systematic" scheme resulting in a landmark conviction for one company and a massive $25 million fine.
In the first case of its kind, Federal Court Justice Michael Wigney said Japanese company Nippon Yusen Kabushiki Kaisha (NYK) had admitted colluding with other shipping lines for contracts to import cars.
NYK, headquartered in Tokyo, is one of the world's largest shipping conglomerates.
The Australian Competition and Consumer Commission alleged that company and other carriers had struck a deal that they would not seek to alter their market shares or try to win existing business from each other.
The cartel affected vehicles transported to Australia by NYK and other shipping lines from Asia, the US and Europe, on behalf of major car makers including Nissan, Suzuki, Honda, Toyota and Mazda.
"NYK's conduct was covert, deliberate, systemic and involved planning and deliberation," Justice Wigney said. The court heard that NYK employees communicated with counterparts at other carriers either by phone or in face-to-face meetings in hallways, lift lobbies or in a small glass room known as the "phone booth". The conversations were "rarely documented", said Justice Wigney. "In some instances, NYK employees did make notes of their discussions ... but did so in a way that concealed or disguised the true nature of their discusions."
Prosecutors alleged NYK and other shipping companies - including Mitsui OSK Lines, Kawasaki Kisen Kaisha, Toyofuji Shipping Co, Nissan Motor Car Carrier Co and Wallenius Wilhelmsen Logistics - had "agreements or understandings" that limited or distorted competition.
NYK alone shipped nearly 70,000 vehicles to Australia on contracts affected by its cartel conduct, the court heard.
"The Australian community relies heavily on imported vehicles," ACCC chairman Rod Sims said, "so a longstanding cartel in relation to the transportation of those vehicles to Australia was of significant concern."
The Federal Court found NYK's conduct was "detrimental to Australian businesses and consumers".
The case was the first time the ACCC used its criminal cartel powers, which were first granted in 2009 after the watchdog's collusion case against Visy and Amcor.
Justice Wigney said the penalty would have been twice as much - $50 million - but had been halved due to NYK's early guilty plea and pledge to co-operate with law enforcement agencies.
Mr Sims said the sentence imposed on NYK sent a "strong warning to the industry" and the wider business community that the lawbreakers can be criminally prosecuted for cartel conduct.
NYK Australia's general manager of corporate services, Jason Glynn, said the penalty decision was being reviewed by management at the company's Tokyo headquarters.
In a statement the company stressed it had co-operated with the ACCC and pleaded guilty which the court had acknowledged had assisted with the prosecution.
The company had also taken steps to ensure that the conduct could not be repeated, the statement said.