EC REQUESTS COMMENTS FOR CONFERENCE IMMUNITY REVIEW
The European Commission today began the first review of the European regulation that grants antitrust immunity to liner conferences by requesting comments from governments and the industry.
EC Regulation 4056/86, which defines the antitrust exemption of liner conferences, has never been reviewed since it was adopted in 1986, although its application has been clarified by the European Commission’s competition directorate.
Announcing the start of the review and the publication of a consultation paper, EC Competition Commissioner Mario Monti said it is “high time” to examine whether the “exceptionally generous antitrust immunity” of the regulation, which benefits shipping companies when they operate in liner conferences, is in line with today’s market conditions.
“Most significantly, the (European) Commission will want to see whether the liner conference regulation results in reliable and efficient scheduled shipping services that meet the requirements of transport users, as was the legislator’s initial aim,” Monti said.
The EC said it was not making policy option proposals at this stage. It is not known whether the review will result in the removal of the antitrust immunity of carriers.
The Brussels-based body said it wants to ascertain whether this immunity still produces the benefits expected and continues to be justified.
Interested parties must submit comments to the EC by June 3.
In 1986, the European council of ministers adopted the maritime regulation, which exempts price-fixing, capacity-sharing and other agreements or consultations between liner shipping companies from European competition rules. The justification for the antitrust exemption was that the rate-setting and other activities of liner conferences lead to stability and reliable scheduled maritime transport services.
The EC said three developments have also provided support for a review:
* The revision of a general regulation on rules and procedures on competition. Regulation 1/2003, which replaces Regulation 17/62, will become effective in May 2004.
* The EC pointed out that major trading partners have also conducted reviews of their own liner shipping exemptions in recent years. It cited the United States’ adoption of the Ocean Shipping Reform Act of 1998, amending the U.S. Shipping Act; and the publication in April 2002 by the Organization for Economic Cooperation and Development of a report criticizing the need for collective rate-setting by carriers.
* The EC said, “the growing trend towards container transport has also led to a reorganization of the sector into consortia or alliances.”
The review of the 4056/86 regulation does not concern the European Union’s consortium regulation 823/2000, which remains valid until 2005 and was found to be working well by both shipping lines and transport users.
The EC said it would closely associate EU member states in this review exercise. Only EU governments can revoke or modify the regulation.
Following its consultation, the EC will put forward, in a second stage, a series of “policy options.” If considered necessary, it will then make proposals for legislative changes.
The EC consultation paper will be published at http://europa.eu.int/comm/competition/general_info/consultation.html.
The EC announced the start of the review of maritime antitrust rules as lawyers representing carriers of the Trans-Atlantic Conference Agreement were contesting EC fines totaling 273 million ecu (about $300 million) imposed in 1998 at the Court of First Instance of Luxembourg.