Competition authorities from Australia, Canada, New Zealand, the UK and USA – also known as the countries of the Five Eyes alliance – are forming a working group to look into illegal conduction, including collusion, in global supply chains.
The working group includes the Australian Competition & Consumer Commission (ACCC), US Department of Justice and Federal Bureau of Investigation, Canadian Competition Bureau, NZ Commerce Commission, and UK Competition and Markets Authority.
In light of the pandemic-induced disruptions that have led to higher freight rates and more expensive goods for consumers, the authorities will come together to prevent anti-competitive conduct from occurring.
“The global freight supply chain is a complex network involving many jurisdictions, so naturally detecting anti-competitive conduct requires strong international partnerships,” ACCC chair Rod Sims said. “Covid-19 has caused the supply chain disruptions the world is currently experiencing, but the purpose of this working group is to detect any attempts by businesses to use these conditions as a cover to work together and fix prices.”
Types of anti-competitive conduct the working group will be watching for include cartels and any other activities that materially impact competition, such as exclusionary arrangements by firms with market power.
The British International Freight Association (BIFA) has welcomed the news, referencing a letter it sent to the UK Department for Transport in January asking for an investigation into the state of competition within the current deepsea container shipping market.
The association, which represents UK freight forwarding and logistics companies, said that its members are 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 considerable concern for members.