The Australian Competition and Consumer Commission (ACCC) has brought its first ever criminal prosecution for cartel conduct.

Japanese global shipping company, Nippon Yusen Kabushiki Kaisha (NYK), has pleaded guilty to criminal cartel conduct following an investigation by the ACCC which resulted in criminal charges being laid by the Commonwealth Director of Public Prosecutions (CDPP).

This is the first time Australia's criminal cartel provisions have been used since they were introduced almost exactly seven years ago.

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Cartel conduct: criminal and civil liability

NYK, has pleaded guilty to charges of fixing prices on shipping routes, including routes between Japan and Australia. A sentencing hearing will now take place, following which a fine will be imposed by the Federal Court of Australia.

Under the Australian Competition and Consumer Act, cartel conduct can attract both criminal and civil liability. Whereas the Act's civil penalty provisions apply even to the conduct of unintentional or unwitting cartelists, criminal sanctions are reserved for situations in which the defendant(s) had either knowledge of, or intention to engage in the relevant cartel conduct. Establishing criminal liability also requires the court to be satisfied beyond reasonable doubt that the defendant is guilty of the relevant offence. By way of contrast, civil contraventions need generally only be established on the balance of probabilities.

While we will need to wait some further months to find out exactly how severe the penalty imposed against NYK will be, corporations found guilty of participating in cartel conduct under Australia's criminal cartel laws can in respect of each offence face fines of up to $10 million, 10% of their annual turnover or three times the gains from the cartel conduct, whichever is the greater.

The Act also allows for prison sentences of up to 10 years to be imposed on individuals who participate in cartel conduct. In the present instance however, only the NYK corporate entity, rather than NYK executives, have been charged, meaning that at least in respect of the current charges, Australian prison sentences will not apply.

Prosecutions in other jurisdiction

The conduct that was the subject of today's yesterday's guilty plea has also seen NYK face similar prosecutions in other jurisdictions. In December last year, NYK was fined $US59.4 million in the United States in relation to the same cartel. In March this year, the US Department of Justice secured a sentence against one of NYK's executives of 15 months in jail for his role in the cartel. NYK has also been fined ¥13 billion by the Japanese Fair Trade Commission.

The ACCC and CDPP were no doubt aided in this instance by the earlier prosecutions undertaken by their international counterparts. The ACCC have has said that they it will continue to investigate other members of the NYK shipping cartel and more criminal cartel charges may follow. Three other companies have also pleaded guilty to participation in the NYK shipping cartel in the US.


Australia's criminal regime for cartels has previously been highly criticised as being overly complex and unclear, with and the 2015 Competition Policy Review ('the Harper Review') recommending recommended that the enforcement regime be simplified.

With their first successful criminal cartel prosecution now secured, it will be interesting to see whether the Australian regulators show a greater willingness to pursue similar charges in future, or if the NYK prosecution was just an isolated case of "low hanging fruit" brought about by the successful prosecutions of the same parties in other jurisdictions.