In future, liner services will be protected from antitrust prosecution by the South Korean competition authority. Parliament has decided to exempt shipping companies from the Fair Trade Act.
The move was at least three years in the making after the Korea Fair Trade Commission (KFTC ) imposed penalties totaling $81 million on 23 liner services in January 2022 for matched freight rates between South Korea and Southeast Asia. Among those affected were Cosco Shipping Lines, Evergreen Marine Corporation and HMM.
Unlike other countries, South Korea’s Shipping Act did not previously provide an explicit exception for joint action by shipping companies. All concerted actions had to be reported to the KFTC – a regulation that enabled the authority to investigate and sanction the freight rate increases from 2003 to 2018.
The shipping companies concerned challenged the penalties. The Seoul High Court initially ruled in their favor in 2024. However, the KFTC successfully appealed to the Supreme Court, which confirmed that the Shipping Act did not exempt the industry from the Fair Trade Act at the time.
On December 1, the National Assembly’s Agriculture, Food and Maritime Affairs Committee voted on an amendment tabled by ruling party members Lee Won-taek and Yoon Joon-byung. The new version stipulates that in future the Ministry of Oceans and Fisheries alone will decide on joint measures by shipping companies. The obligation to notify the KFTC no longer applies.
“This change is an important milestone for the South Korean shipping industry,” said Yang Chang-ho, Vice Chairman of the Korea Shipowners’ Association. It ends the “gruelling legal debate” and allows the industry to focus on stabilizing global supply chains.
With the reform, South Korea is following other countries that grant liner services greater freedom in setting freight rates. In the USA, shipping companies are exempt from antitrust measures and the Federal Maritime Commission monitors the companies’ joint activities. In the EU, the conference system was abolished in 2008 after large container shipping companies formed alliances.
