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(I-AutoNewsWire.com, September 19, 2012 ) San Francisco, CA- On Thursday, authorities searched the offices of shipping companies located in Japan, including three major domestic firms. The searches were initiated on suspicion of violations related to the Anti-monopoly Law, which is directly related to an alleged price-fixing cartel trying to control maritime shipping charges for cargo. Specifically, they focused on cars which are exported from Japan.
Three Major Companies Investigated
Of the companies that were investigated, Mitsui O.S.K. Lines, Ltd., Nippon Yusen Kabushiki Kaisha, and Kawasaki Kisen Kaisha, Ltd., All companies are based in Tokyo, Japan. The three companies are believed to hold the largest share of the current domestic maritime vehicle transport market. This market is valued at between 200 billion to 300 billion yen each year.
Possibility of a Broader Level of Influence
The Fair Trade Commission will be working with regulatory authorities in overseas ports in order to see if the cartel may have been organized on a global level. Other possible firms suspected to be involved in the price-fixing cartel include small firms that are based in one of the Scandinavian countries as well as New Zealand.
The Cartel May Have Existed for Years
Sources note that the cartel may have existed for several years. It is postulated it was created to compensate for rising fuel costs and other expenses related to the shipping of vehicles overseas. It is also suspected that the companies may have formed smaller groups that would manage specific shipping routes throughout the world. The three larger Japanese companies served as the center of the cartel, which controlled competition by manipulating transport orders from the named companies.
Why is Price Fixing Bad for Consumers and Manufacturers
By manipulating the pricing of the transport orders, the cartel created a price-fixing strategy which harms competition by maintaining artificially high prices. Eventually, these inflated prices have a “trickle down effect” and reflect on the sticker price of a vehicle purchased by consumers. With the average cargo vessel able to carry roughly 6,000 cars to a port, the ramifications of the manipulated transport orders could mean higher costs for companies. This directly affects the price they offer to potential consumers.
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Source: EmailWire.Com
Source: EmailWire.com
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