Maritime Transport Subject to European Union (EU) General Competition Law Guidelines From 26 September 2013
Monday, February 25, 2013

Up until 18 September 2006, maritime transport services were exempt from the EU competition rules in respect of liner conferences.  In addition, cabotage and international tramp vessel services were exempt from the enforcement powers in competition matters.  These exemptions were abolished on 18 September 2006, subject to a two year transitional period.  Maritime transport services then became subject to sector-specific guidelines that are applicable until 26 September 2013, when they will be superseded by the general, non-sector-specific guidelines

Background

The sector-specific guidelines for maritime shipping covered three main topics:

  1. Market definition
  2. An analytical framework for assessing information exchanges between competitors in liner shipping
  3. An analytical framework for assessing horizontal cooperation between tramp shipping operators in “pools”.

The sector-specific guidelines contain either a summary of existing case law or a transposition to the maritime transport sector of pre-existing general rules.  They do not create new rights or obligations for either the European Commission or maritime operators.

For these reasons, the Commission no longer sees the sector-specific guidelines as necessary.  As a result, from 26 September 2013, maritime transport services will no longer be subject to sector-specific guidelines, but to the general guidelines that are applied to all sectors.  These include the following:

  • Guidelines on the application of Article 101 of the Treaty to horizontal cooperation agreements, published in 2011
  • Guidelines on the application of Article 81(3) [now article 1013)] of the Treaty, published in 2004
  • Commission notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) [now Article 101(1) of the Treaty], published in 2001
  • Commission notice on the definition of the relevant market for the purposes of [European Union] competition law, published in 1997

Comment

Although in theory the sector-specific guidelines will cease to be applicable after 23 September 2013, it could still be useful to consult them after that date because they provide examples of how the general guidelines apply to certain, specific situations that arise in the maritime shipping sector. 

The sector-specific guidelines point out a particular problem with exchanges of aggregated capacity forecasts in liner shipping.  Such exchanges may lead to the adoption of a common policy by several or all carriers and result in the provision of services at above-competitive rates.  There is also a risk that the aggregated data may be combined with individual announcements by liner carriers and then disaggregated, thus enabling shipping companies to identify the market positions and strategies of their competitors.

The sector-specific guidelines also explain how tramp shipping pools can be pro-competitive if they lead to efficiency gains in terms of better utilisation rates and economies of scale, for example, by spreading fleets geographically and reducing the number of ballast voyages.  Pools can also be pro-competitive if they enable two or more ship-owners to tender for and perform freight contracts that they could not fulfil on their own.  Such pro-competitive practices are exempt from the prohibition in Article 101(1) of the Treaty, provided users receive a fair share of the efficiencies generated and competition is maintained in all respects other than those absolutely necessary to achieve the efficiencies.  Pool agreements that have as their sole object the coordination of pricing will therefore be caught by the prohibition in Article 101(1).

It should also be noted that, until 25 April 2015, there is still a block exemption from the prohibition in Article 101(1) in respect of certain consortia agreements referred to in Commission Regulation (EC) No 906/2009.  This block exemption applies to consortia agreements relating to international liner shipping services from or to an EU port, exclusively for the carriage of cargo, on condition that the combined market share of the participants does not exceed 30 per cent  This block exemption allows the co-ordination of sailing timetables, the cross-chartering of space or slots on vessels, the pooling of vessels or port installations, the use of joint operations offices and the provision of containers, etc.  It also allows capacity adjustments in response to fluctuations in supply and demand, the joint operation or use of port terminals and related services, and other ancillary restrictions.  It prohibits specifically “hardcore” restrictions, such as fixing prices with third parties, limitation of capacity or sales (other than temporary adjustments to deal with fluctuations in supply and demand) and allocation of markets or customers.

 

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