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Exterior view of the Supreme Court of Korea in Seoul. (Photo: Yonhap News) |
[Alpha Biz= Kim Jisun] Seoul, May 18, 2025 — The Supreme Court of Korea has upheld the legality of the Fair Trade Commission’s (KFTC) imposition of fines on domestic and international shipping companies for colluding on freight rates. The Court rejected claims that the Ministry of Oceans and Fisheries (MOF) has exclusive jurisdiction over freight rate-related matters, thus barring the KFTC’s intervention.
According to the legal community, the Supreme Court’s Third Panel (Presiding Justice Eom Sang-pil) overturned a lower court ruling in favor of Taiwanese shipping company A and 10 Korean shipping firms, who had sought to annul the KFTC’s corrective orders. The case was remanded to the Seoul High Court for reconsideration.
In 2022, the KFTC issued corrective orders and imposed fines totaling approximately 96.2 billion KRW on 23 shipping companies, including HMM, Pan Ocean, Korea Shipping, and Changjin Shipping. The KFTC investigation found that these companies colluded on freight rates about 120 times over 15 years (2003–2018) on export-import routes between Korea and Southeast Asia.
The shipping companies argued their conduct was legitimate under the Shipping Act, which exempts joint actions reported to the MOF Minister and agreed upon with shipper associations from being considered collusion. They claimed to have reported their freight rate agreements in advance. However, the KFTC maintained that the reporting procedures were insufficient and dismissed the companies’ claims, leading to the legal challenge.
The Seoul High Court sided with the shipping companies, ruling that joint freight rate agreements fall exclusively under the Shipping Act and MOF’s authority, and that the KFTC has no regulatory jurisdiction over such conduct. The court noted that even if the agreed rates were deemed excessively high, the MOF is responsible for regulation, with specific procedures outlined in the Shipping Act.
The Supreme Court reversed this decision. It ruled that the Shipping Act does not grant unlimited permission for joint actions but only allows them insofar as they do not substantially restrict competition. Furthermore, the Court emphasized that the Fair Trade Act is designed to enforce a constitutionally mandated social market economy across all industries, unless otherwise specified by law. Since the Shipping Act contains no exemption clause excluding the KFTC’s regulatory authority, the Commission’s jurisdiction remains valid.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
