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Canada joins countries investigating anticompetitive freight conduct

Canada’s Competition Bureau has joined the competition authorities of the United States, Australia, New Zealand, and the United Kingdom in a new working group focussed on sharing information to identify and prevent potentially anticompetitive conduct in the global supply and distribution of goods.

The working group brings together the Bureau, the U.S. Department of Justice, the Australian Competition and Consumer Commission (ACCC), the New Zealand Commerce Commission and the U.K. Competition and Markets Authority.

In light of pandemic-related disruptions to global markets, the five competition authorities will share information on potentially anticompetitive conduct affecting global and domestic supply chains. The purpose of the working group is to help identify attempts by businesses to use supply chain disruptions as a cover for price-fixing or other collusive activities that involve competitors cooperating instead of competing with each other.

Competitive prices and product choices are vital to consumers and businesses, particularly those struggling to make ends meet in the wake of the pandemic. Competitive markets also play a key role in driving economic recovery and growth, to the benefit of all Canadians.

The Competition Bureau will work closely with its international counterparts and will not hesitate to take action against any conduct in violation of Canada’s Competition Act.

“While the Competition Bureau has offered businesses flexibility in contributing to legitimate pandemic response efforts that benefit Canadians, we want to be clear: we have zero tolerance for any attempts to use pandemic-related supply chain disruptions as a cover for criminal collusion that harms consumers and damages Canada’s economy,” said Matthew Boswell,
Commissioner of Competition

“This is a timely and welcome announcement that competition authorities around the world share shippers’ anxieties about how markets are behaving,” said James Hookham, Executive Director of the Global Shippers’ Forum. “Carriers should consider it a ‘verbal warning’ over how rates and capacity are expected to behave as the global economy emerges from the pandemic.”

 The UK’s main trade association for freight forwarding and logistics companies, British International Freight Association (BIFA), says its members are extremely concerned that practices undertaken by container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade.

In particular BIFA members have voiced their concerns about having their contract rates cancelled by container shipping lines forcing them onto the more expensive spot market. Limiting access to the market is causing shippers considerable concern.

“We are convinced that the well-documented chaos within the container shipping sector is leading to commercial power becoming increasingly concentrated, resulting in diminished market choice and competition, and distorted market conditions. It will be interesting to see if the five competition authorities find that the current supply chain disruptions are a direct result of anti-competitive conduct,” said BIFA director general, Robert Keen. (Port of Hamburg photo)