(Cap. 50B) Notice of Infringement Decision Issued by CCS
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Section 68 of the Competition Act (Cap. 50B) Notice of Infringement Decision issued by CCS Infringement of the section 34 prohibition in relation to the provision of air freight forwarding services for shipments from Japan to Singapore 11 December 2014 Case number: CCS 700/003/11 Redacted confidential information in this Notice is denoted by square parenthesis []. TABLE OF CONTENTS CHAPTER 1: THE FACTS .................................................................................................... 4 A. The Parties .................................................................................................................... 4 (i) Deutsche Post A.G., DHL Global Forwarding Japan K.K., DHL Global Forwarding Management (Asia Pacific) Pte. Ltd. and DHL Global Forwarding (Singapore) Pte. Ltd. ............................................................................................. 5 (ii) Hankyu Hanshin Express Co., Ltd. and Hankyu Hanshin Express (Singapore) Pte. Ltd. ................................................................................................................. 7 (iii) “K” Line Logistics, Ltd. and “K” Line Logistics (Singapore) Pte. Ltd. .............. 7 (iv) Kintetsu World Express Inc. Japan and KWE-Kintetsu World Express (S) Pte. Ltd. ........................................................................................................................ 8 (v) MOL Logistics (Japan) Co., Ltd. and MOL Logistics (Singapore) Pte. Ltd. ....... 9 (vi) Nippon Express Co., Ltd. and Nippon Express (Singapore) Pte. Ltd. ................. 9 (vii) Nishi-Nippon Railroad Co., Ltd. and NNR Global Logistics (S) Pte. Ltd. ........ 10 (viii) Nissin Corporation and Nissin Transport (S) Pte. Ltd. ....................................... 10 (ix) Vantec Corporation and Vantec World Transport (S) Pte. Ltd. ......................... 11 (x) Yamato Holdings Co., Ltd., Yamato Global Logistics Japan Co., Ltd. and Yamato Asia Pte. Ltd. ......................................................................................... 12 (xi) Yusen Logistics Co., Ltd. and Yusen Logistics (Singapore) Pte. Ltd. ............... 13 B. Background of Related Industry .............................................................................. 14 C. Investigation and Proceedings .................................................................................. 18 CHAPTER 2: LEGAL AND ECONOMIC ASSESSMENT .............................................. 21 A. The Section 34 Prohibition ........................................................................................ 21 B. Application to Undertakings ..................................................................................... 22 C. Agreements and/or Concerted Practices .................................................................. 31 D. Single Overall Infringement ...................................................................................... 38 E. Object or Effect of Preventing, Restricting or Distorting Competition ................ 41 F. Appreciably Prevent, Restrict or Distort Competition ........................................... 42 G. Burden and Standard of Proof ................................................................................. 45 H. The Relevant Market ................................................................................................. 46 I. Evidence relating to the Agreement and/or Concerted Practice, CCS’s Analysis of the Evidence and CCS’s Conclusion on the Infringement ......................................... 48 (I) Japanese Security Surcharge and Japanese Explosives Examination Fee ...... 48 (II) The Japanese Fuel Surcharge ............................................................................ 110 2 CHAPTER 3: DECISION OF INFRINGEMENT .......................................................... 175 A. Addressees of CCS’s Decision ................................................................................. 176 B. Duration of Infringement ........................................................................................ 208 CHAPTER 4: CCS’S ACTION .......................................................................................... 209 A. Financial Penalties - General Points ....................................................................... 209 B. Calculation of Penalties ........................................................................................... 212 (i) Seriousness of the Infringements and Relevant Turnover ................................ 213 (ii) Duration of the Infringements .......................................................................... 223 (iii) Aggravating and Mitigating Factors ................................................................. 224 (iv) Other Relevant Factors ..................................................................................... 227 (v) Maximum statutory penalty .............................................................................. 227 C. Penalty for DGF ....................................................................................................... 227 D. Penalty for Hankyu Hanshin .................................................................................. 229 E. Penalty for K Line .................................................................................................... 230 F. Penalty for KWE ...................................................................................................... 232 G. Penalty for MLG ...................................................................................................... 234 H. Penalty for Nippon Express .................................................................................... 237 I. Penalty for NNR ....................................................................................................... 238 J. Penalty for Nissin ..................................................................................................... 240 K. Penalty for Vantec .................................................................................................... 241 L. Penalty for Yamato .................................................................................................. 243 M. Penalty for Yusen ..................................................................................................... 244 N. Conclusion on Penalties ........................................................................................... 246 ANNEX A: INTERVIEWS CONDUCTED BY CCS ....................................................... 247 3 CHAPTER 1: THE FACTS A. The Parties 1. Following information1 received from DHL Global Forwarding on 28 March 2012, the Competition Commission of Singapore (“CCS”) commenced an investigation into anti-competitive agreements and/or concerted practices in respect of fees and surcharges related to the supply of air freight forwarding services for cargo shipped from Japan to Singapore. 2. CCS’s investigation indicates that the following undertakings (each a “Party”, together, the “Parties”) have been involved in the direct or indirect fixing of prices and exchange of information regarding fees and surcharges associated with the air shipment of cargo from Japan to Singapore by freight forwarders that has infringed section 34 of the Competition Act (Cap. 50B) (“the Act”): (i) Deutsche Post A.G., DHL Global Forwarding Japan K.K. (“DGF Japan”), DHL Global Forwarding Management (Asia Pacific) Pte. Ltd. (“DGF Asia Pacific”) and DHL Global Forwarding (Singapore) Pte. Ltd. (“DGF Singapore”) (together “DGF”)2; (ii) Hankyu Hanshin Express Co., Ltd. (“HHE Co.”) and its wholly- owned subsidiary Hankyu Hanshin Express (Singapore) Pte. Ltd. (“HHE Singapore”) (together “Hankyu Hanshin”)3; (iii) “K” Line Logistics, Ltd. (“KLJ”) and its subsidiary “K” Line Logistics (Singapore) Pte. Ltd. (“KLS”) (together “K Line”)4; (iv) Kintetsu World Express Inc. Japan (“KWEJ”) and its wholly-owned subsidiary KWE-Kintetsu World Express (S) Pte. Ltd. (“KWES”) (together “KWE”)5; (v) MOL Logistics (Japan) Co., Ltd. (“MLG-JP”) and its subsidiary MOL Logistics (Singapore) Pte. Ltd. (“MLG-SG”) (together “MLG”)6; (vi) Nippon Express Co., Ltd. (“NEJ”) and its subsidiary Nippon Express (Singapore) Pte. Ltd. (“NES”) (together “Nippon Express”)7; 1 See paragraph 52. 2 DGF is referred to in the documents provided to CCS variously as DGF, Danzas, Maruzen, DHL Global Forwarding, DHL, and DZK. 3 For HHE Co. (formerly HEX and HAC), HEX is referred to in the documents provided to CCS variously as HEX, HEI, HTI, Hankyu and Hankyu Cargo. HAC is referred to in documents provided to CCS variously as HAC, Hanshin and HER. 4 K Line is referred to in the documents provided to CCS variously as K Line, Kawasaki, KAS, and KKS, KLL. Kawasaki Kisen Kaisha and KKK is also referred to in certain documents recording meetings K Line participated in. 5 KWE is referred to in the documents provided to CCS variously as KWE and Kintetsu. 6 MLG is referred to in the documents provided to CCS variously as MOL, Mitsui, Mitsui O.S.K Lines, MOA, MO, MO Logistics and Mitsui OSK. 4 (vii) Nishi-Nippon Railroad Co., Ltd. (“NNR Japan”) and its subsidiary NNR Global Logistics (S) Pte. Ltd. (“NNR Singapore”) (together “NNR”)8; (viii) Nissin Corporation and its wholly-owned subsidiary Nissin Transport (S) Pte. Ltd. (“Nissin Singapore”) (together “Nissin”)9; (ix) Vantec Corporation (“Vantec Japan”) (of which Vantec World Transport Co., Ltd. (“VWT Japan”) is now a part) and Vantec World Transport (S) Pte. Ltd. (“Vantec