EC deals blow to carriers’ conference immunity

EC deals blow to carriers’ conference immunity    The European Commission today formally adopted a “white paper,” or proposal, which considers the removal of the antitrust pricing immunity of liner shipping conferences in European trades.
   The proposal's publication is the most significant step to-date by the Brussels commission to reform liner carriers' century-old pricing immunity. Europe is the first major region to propose to eliminate the immunity.
   The EC, whose competition directorate started a consultation on a potential reform in March 2003, said its new proposal paper “considers repealing the generous exemption” from competition rules which has benefited the shipping sector.
   “Shipping companies have enjoyed a very generous exemption from competition rules for very long,” said Mario Monti, the commissioner for competition. “Like other competition authorities we believe that this exemption was justified at some point but must now be re-examined bearing in mind its impact for the competitiveness of the European industry and for exporting companies in particular.”
   The justification for the immunity contained in Europe’s liner conference regulation 4056/86 “was the assumption that the rate-setting and other activities of liner conferences lead to stable freight rates, which in turn assured shippers of reliable scheduled maritime transport services,” the EC said. However, it said this immunity has since been subject to review in several parts of the world, including at the Organization for Economic Cooperation and Development.
   Monti said he is encouraged by the “present constructive attitude” of shipping companies.
   In August, Brussels-based European Liner Affairs Association proposed to the European Commission competition directorate a compromise that would remove the immunity for joint conference rate pricing but retain a narrower immunity for ocean carriers covering collective activities such as the setting of joint surcharges and the calculation of price indexes. The European Shippers’ Council has questioned the need for a new immunity.
   In its announcement today, the EC noted that liner shipping conferences have historically been granted some form of exemption or immunity from the competition rules in many jurisdictions. During its review, the EC “will continue to bear in mind that liner shipping is a global industry,” it added.
   The “white paper” is the second step in the EU review and should be followed by concrete legislative proposals in 2005, the EC said. The EC has invited interested parties to comment on its proposal by Dec. 15.
   The proposal “analyzes whether to maintain, modify or repeal the current regulation and, particularly, whether to replace the present so-called block exemption with other instruments such as, for instance, a set of guidelines,” the EC said.
   The white paper can be found on the Web at:
https://europa.eu.int/comm/competition/index_en.html .
   Until now, all reviews of carriers' pricing immunity by policymakers have led to the retention of the immunity or, as in the United States in 1998, to a narrowing of the immunity. The Australian government is also considering a review of the immunity of carrier conferences and discussion agreements.