DOJ and FMC intend to continue partnership focused on fair competition in ocean shipping sector

The United States Department of Justice (DOJ) and the Federal Maritime Commission (FMC) announced late last week that they have reaffirmed what they called their continuing commitment “to jointly enforcing competition laws and strengthening their cooperation to promote competition in the ocean freight transportation system.

This follows a July 2021 inking of a Memorandum of Understanding (MOU), which formalized the working relationship between the organizations and established a framework for partnership between the FMC and DOJ’s Antitrust Division that “enhances cooperation in the enforcement of antitrust and competition laws, including the Shipping Act…by facilitating information exchange between and among attorneys, economists, and technical experts,” according to DOJ and FMC.

What’s more, they cited the objectives of the White House’s July 2021 Executive Order on Promoting Competition in the American Economy, which noted that the global container shipping industry has consolidated into a small number of dominant foreign-owned lines and alliances, which can disadvantage American exporters, will be a focus of this partnership.

A key part of this recent announcement, according to Attorney General Merrick Garland and FMC Chairman Daniel Maffei, are two new key steps, including:

• DOJ providing FMC with the support of attorneys and economists from the Antitrust Division for enforcement of violations of the Shipping Act and related laws; and
• FMC will provide the Antitrust Division with support and maritime industry expertise for Sherman Act and Clayton Act enforcement actions

“The Justice Department will continue to aggressively enforce our antitrust laws – no matter the industry, no matter the company, and no matter the individual,” said Attorney General Garland in a statement. “Competition in the maritime industry is integral to lowering prices, improving quality of service, and strengthening supply chain resilience. Expanding joint enforcement partnerships like the partnership between the FMC and DOJ is one of our most powerful tools for promoting competition. Lawbreakers should know that the Justice Department will provide the Federal Maritime Commission all necessary litigation support as it pursues its mission of promoting competition in ocean shipping.”

And the FMC’s Maffei said that FMC and DOJ have a history of cooperating to the benefit of the American consumer, and he added that this new support will help ensure that the working relationship will help both government entities in shared goal of fair competition.

When the FMC and DOJ first announced their MOU in July 2021, an ocean shipping stakeholder told LM, the arrangement was akin to the premise that one does not knock on the door at the police station unless you think you have a crime to report, adding that may signal that the FMC is taking a more hawkish stance towards the sector.

“I would not try to pre-judge what the FMC is going to do or what it might find out, but I think clearly the container lines can pretty much do what they want so far, which is in a competitive market, and they will have to have more of an eye on regulation,” he said. “Nobody complains about the cost of shipping when the cost of shipping is falling.”