Price Fixing Alleged In Shipping

SAN JUAN, Puerto Rico (CN) - Horizon Lines and three other companies fixed prices and control 100% of the $750 million container shipping business to and from Puerto Rico, a would-be rival says in a federal antitrust class action.

Magic Transport says Horizon and its alleged co-conspirators control 100% of the market, in restraint of commerce. Magic claims Horizon controls 34.5% of the market, Crowley Liner Services 31%, Sea Star Line 20.6%, and Trailer Bridge 13.9%.

Magic says the Puerto Rico container shipping market is worth more than $750 million a year.

"Because of high entry barriers, the defendants are the only ocean freight companies servicing the Puerto Rico market," the complaint states.

Federal officers raided the first three companies in April, investigating their price fixing, the complaint states. "The raid of Horizon Line's offices came two weeks after the unexpected resignation of the company's chief financial officer Mark Urbania," it adds.

"Frequently, search warrants result from information obtained from an amnesty applicant," the complaint states. "Under the DOJ's antitrust amnesty program, the first conspirator to apply and obtain amnesty receives favorable treatment from the government with respect to potential criminal and civil prosecution. However, to be granted amnesty, the applicant must fully disclose the existence of a conspiracy and the extent of its participation. It is likely, though not certain, that there is an amnesty applicant involved in this matter."

Magic claims four executives in the defendants' companies have pleaded guilty to conspiring "to fix prices, suppress and eliminate competition and allocate market shares. ... These officers are Peter Baci, R. Kevin Gill, Gregory Glova, and Gabriel Serra."

Magic demands treble damages. It is represented by Eric Quetglas Jordan of San Juan.

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