# C_2016327EN.01000401.xml

| 6.9.2016 | EN | Official Journal of the European Union | C 327/4 |
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6.9.2016

EN

Official Journal of the European Union

C 327/4

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Summary of Commission Decision

of 7 July 2016

relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement

(Case AT.39850 — Container Shipping)

(notified under document C(2016) 4215)

(Only the English text is authentic)

(2016/C 327/04)

On 7 July 2016, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA agreement. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003
   (1)
  , the Commission herewith publishes the names of the parties and the main content of the decision, having regard to the legitimate interest of undertakings in the protection of their business secrets. The decision is published in full in English on the website of the Directorate-General for Competition at: http://ec.europa.eu/competition/index_en.html

On 7 July 2016, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA agreement. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003

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, the Commission herewith publishes the names of the parties and the main content of the decision, having regard to the legitimate interest of undertakings in the protection of their business secrets. The decision is published in full in English on the website of the Directorate-General for Competition at: http://ec.europa.eu/competition/index_en.html

1.   INTRODUCTION

INTRODUCTION

| (1) | The decision makes legally binding the commitments offered by 14 container liner shipping undertakings (hereinafter collectively referred to as ‘the Parties’): Maersk (Denmark), MSC (Switzerland), CMA CGM (France), Hapag-Lloyd (Germany), Hamburg Süd (Germany), COSCO (China), OOCL (Hong Kong), Evergreen (Taiwan), Hanjin (South Korea), Hyundai Merchant Marine (South Korea), MOL (Japan), NYK (Japan), UASC (United Arab Emirates) and ZIM (Israel). |
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(1)

The decision makes legally binding the commitments offered by 14 container liner shipping undertakings (hereinafter collectively referred to as ‘the Parties’): Maersk (Denmark), MSC (Switzerland), CMA CGM (France), Hapag-Lloyd (Germany), Hamburg Süd (Germany), COSCO (China), OOCL (Hong Kong), Evergreen (Taiwan), Hanjin (South Korea), Hyundai Merchant Marine (South Korea), MOL (Japan), NYK (Japan), UASC (United Arab Emirates) and ZIM (Israel).

2.   CASE DESCRIPTION

CASE DESCRIPTION

2.1.   Procedure

Procedure

| (2) | By decisions of 21 November 2013 and 13 November 2015 the Commission initiated proceedings against the Parties. On 26 November 2015 the Commission adopted the Preliminary Assessment as referred to in Article 9(1) of Regulation (EC) No 1/2003 which set out the Commission's competition concerns. The Preliminary Assessment was notified to the Parties on 26 November 2015. |
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(2)

By decisions of 21 November 2013 and 13 November 2015 the Commission initiated proceedings against the Parties. On 26 November 2015 the Commission adopted the Preliminary Assessment as referred to in Article 9(1) of Regulation (EC) No 1/2003 which set out the Commission's competition concerns. The Preliminary Assessment was notified to the Parties on 26 November 2015.

| (3) | Between 21 December 2015 and 12 February 2016 the Parties submitted commitments to the Commission in response to the Preliminary Assessment (‘Commitments’). |
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(3)

Between 21 December 2015 and 12 February 2016 the Parties submitted commitments to the Commission in response to the Preliminary Assessment (‘Commitments’).

| (4) | On 16 February 2016 a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the case and the Commitments and inviting interested third parties to give their observations on the Commitments within one month following publication (‘the Article 27(4) Notice’). |
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(4)

On 16 February 2016 a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the case and the Commitments and inviting interested third parties to give their observations on the Commitments within one month following publication (‘the Article 27(4) Notice’).

Official Journal of the European Union

| (5) | On 27 June 2016 the Advisory Committee on Restrictive Practices and Dominant Positions was consulted and gave its positive opinion. On 28 June 2016 the Hearing Officer issued his final report. |
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(5)

On 27 June 2016 the Advisory Committee on Restrictive Practices and Dominant Positions was consulted and gave its positive opinion. On 28 June 2016 the Hearing Officer issued his final report.

2.2.   The practice subject to the proceedings

The practice subject to the proceedings

| (6) | The Parties have regularly announced their intended (future) increases of prices for deep-sea container liner shipping services, at least on routes from Far East Asia to Northern Europe and the Mediterranean (westbound), on their websites, via the press, or in other ways. These announcements indicate the amount of the increase in US-Dollars per transported container unit (twenty-foot equivalent unit, ‘TEU’), the affected trade route and the date of implementation. Such announcements are widely known in the industry as ‘General Rate Increase Announcements’ or ‘GRI Announcements’. They generally concern sizable rate increases of several hundred US-Dollars per TEU. |
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(6)

The Parties have regularly announced their intended (future) increases of prices for deep-sea container liner shipping services, at least on routes from Far East Asia to Northern Europe and the Mediterranean (westbound), on their websites, via the press, or in other ways. These announcements indicate the amount of the increase in US-Dollars per transported container unit (twenty-foot equivalent unit, ‘TEU’), the affected trade route and the date of implementation. Such announcements are widely known in the industry as ‘General Rate Increase Announcements’ or ‘GRI Announcements’. They generally concern sizable rate increases of several hundred US-Dollars per TEU.

| (7) | GRI Announcements were made typically 3 to 5 weeks before their intended implementation date, and during that time some or all Parties announced similar intended rate increases for the same or similar routes and the same or similar implementation date. Announced GRIs have sometimes been postponed or modified by some of the Parties, possibly aligning them with the GRIs announced by other Parties. |
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(7)

GRI Announcements were made typically 3 to 5 weeks before their intended implementation date, and during that time some or all Parties announced similar intended rate increases for the same or similar routes and the same or similar implementation date. Announced GRIs have sometimes been postponed or modified by some of the Parties, possibly aligning them with the GRIs announced by other Parties.

| (8) | In the Preliminary Assessment of 26 November 2015, the Commission expressed the concern that GRI Announcements may be of little value for customers: stating only the amount of an intended increase may not inform customers of the new full price they will be asked to pay in the future. In addition, GRI Announcements may have only limited committal value and thus, customers may not be able to rely on them for their purchasing decisions. |
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(8)

In the Preliminary Assessment of 26 November 2015, the Commission expressed the concern that GRI Announcements may be of little value for customers: stating only the amount of an intended increase may not inform customers of the new full price they will be asked to pay in the future. In addition, GRI Announcements may have only limited committal value and thus, customers may not be able to rely on them for their purchasing decisions.

| (9) | The Commission further expressed the concern that this practice may allow the Parties to explore each other's pricing intentions and to coordinate their behaviour. This practice may have enabled the Parties to ‘test’, without incurring the risk of losing customers, whether they could reasonably have implemented a price increase and thereby may have reduced strategic uncertainty for the Parties and diminished the incentives to compete. The Commission was concerned that this conduct may have amounted to a concerted practice in violation of Article 101 TFEU and Article 53 of the EEA Agreement. |
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(9)

The Commission further expressed the concern that this practice may allow the Parties to explore each other's pricing intentions and to coordinate their behaviour. This practice may have enabled the Parties to ‘test’, without incurring the risk of losing customers, whether they could reasonably have implemented a price increase and thereby may have reduced strategic uncertainty for the Parties and diminished the incentives to compete. The Commission was concerned that this conduct may have amounted to a concerted practice in violation of Article 101 TFEU and Article 53 of the EEA Agreement.

2.3.   The commitments offered

The commitments offered

| (10) | The Parties have offered commitments pursuant to Article 9 of Regulation (EC) No 1/2003 to meet the Commission's competition concerns in relation to the abovementioned practice. |
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(10)

The Parties have offered commitments pursuant to Article 9 of Regulation (EC) No 1/2003 to meet the Commission's competition concerns in relation to the abovementioned practice.

| (11) | The Parties offered to stop publishing and communicating GRI announcements, i.e. changes to prices expressed solely as the amount or percentage of the change. |
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(11)

The Parties offered to stop publishing and communicating GRI announcements, i.e. changes to prices expressed solely as the amount or percentage of the change.

| (12) | The Parties will not be obliged to publish or communicate (hereinafter referred to as ‘announce’) their prices, but should they choose to do so, the announcements must enable purchasers to understand and rely on them. For that purpose the parties offered that price announcements will contain at least the following information:






  (a) | the amount of the base rate, bunker charges (‘BAF’), security charges, terminal handling charges (‘THC’) and peak season charges (‘PSS’, or similar charges); |
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(12)

The Parties will not be obliged to publish or communicate (hereinafter referred to as ‘announce’) their prices, but should they choose to do so, the announcements must enable purchasers to understand and rely on them. For that purpose the parties offered that price announcements will contain at least the following information:

(a)

the amount of the base rate, bunker charges (‘BAF’), security charges, terminal handling charges (‘THC’) and peak season charges (‘PSS’, or similar charges);

| (b) | which other charges may apply; |
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(b)

which other charges may apply;

| (c) | the services to which they apply; |
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(c)

the services to which they apply;

| (d) | the period to which they relate (which can be either expressed as a fixed period or open ended, in which case prices are valid until further notice). |
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(d)

the period to which they relate (which can be either expressed as a fixed period or open ended, in which case prices are valid until further notice).

Announcements will not be made more than 31 days before implementation day.

| (13) | The Parties shall be bound by their price announcements during their validity period as maximum prices, but will be free to offer lower prices. |
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(13)

The Parties shall be bound by their price announcements during their validity period as maximum prices, but will be free to offer lower prices.

| (14) | In order to facilitate the conduct of business, the Parties include two exceptions to the commitments in situations that would be unlikely to give rise to the Commission's competition concerns. The commitments will not apply to:






  (a) | communications with purchasers who on that date have a rate agreement in force on the route to which the communication refers; |
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(14)

In order to facilitate the conduct of business, the Parties include two exceptions to the commitments in situations that would be unlikely to give rise to the Commission's competition concerns. The commitments will not apply to:

(a)

communications with purchasers who on that date have a rate agreement in force on the route to which the communication refers;

| (b) | communications during bilateral negotiations or communications tailored to the needs of identified purchasers. |
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(b)

communications during bilateral negotiations or communications tailored to the needs of identified purchasers.

The Parties shall however remain bound by the maximum prices set out in relevant price announcements that are applicable to the same services and customers referred to in the communications, under the conditions set out in the commitments.

| (15) | The commitments will apply for 3 years to all routes to and from the EEA, starting five month after the adoption of the Commission commitment decision. |
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(15)

The commitments will apply for 3 years to all routes to and from the EEA, starting five month after the adoption of the Commission commitment decision.

| (16) | The commitments will not prevent the Parties from complying with requirements based on laws or regulations of other jurisdictions. |
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(16)

The commitments will not prevent the Parties from complying with requirements based on laws or regulations of other jurisdictions.

2.4.   The market test

The market test

| (17) | In accordance with Article 27(4) of Regulation (EC) No 1/2003, the Commission published a market test notice along with the proposed commitments on 16 February 2016, inviting interested third parties to comment. Overall, the observations received did not identify new competition concerns and contained no points to reconsider the substance of the draft commitments offered by the carriers. |
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(17)

In accordance with Article 27(4) of Regulation (EC) No 1/2003, the Commission published a market test notice along with the proposed commitments on 16 February 2016, inviting interested third parties to comment. Overall, the observations received did not identify new competition concerns and contained no points to reconsider the substance of the draft commitments offered by the carriers.

2.5.   Assessment and proportionality of the proposed commitments

Assessment and proportionality of the proposed commitments

| (18) | The commitments in their final form are sufficient to address the concerns identified by the Commission in its Preliminary Assessment without being disproportionate. |
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(18)

The commitments in their final form are sufficient to address the concerns identified by the Commission in its Preliminary Assessment without being disproportionate.

| (19) | Timely, transparent and committal price announcements would allow customers to make informed purchasing decisions and make it difficult for the Parties to collude on prices. Although more transparent price announcements would by nature mean more transparency to both the Parties and customers, informed customers would be in a position to exert pressure on the Parties making collusion difficult and risky. |
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(19)

Timely, transparent and committal price announcements would allow customers to make informed purchasing decisions and make it difficult for the Parties to collude on prices. Although more transparent price announcements would by nature mean more transparency to both the Parties and customers, informed customers would be in a position to exert pressure on the Parties making collusion difficult and risky.

| (20) | The commitments are only limited to the way in which prices are announced and do not interfere with the Parties' commercial discretion whether to make price announcements and how to set their prices. Because these commitments bring a major change in the way the sector as a whole may announce prices it was appropriate to limit their duration to three years in order to examine their effect on the market. The commitments are therefore proportionate. |
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(20)

The commitments are only limited to the way in which prices are announced and do not interfere with the Parties' commercial discretion whether to make price announcements and how to set their prices. Because these commitments bring a major change in the way the sector as a whole may announce prices it was appropriate to limit their duration to three years in order to examine their effect on the market. The commitments are therefore proportionate.

3.   CONCLUSIONS

CONCLUSIONS

| (21) | The decision makes the commitments proposed by the carriers legally binding upon them. |
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(21)

The decision makes the commitments proposed by the carriers legally binding upon them.

| (22) | In light of the final commitments offered by the Carriers, the Commission considers that there are no longer grounds for action on its parts. The Decision shall be binding from 7 December 2016 until 7 December 2019. |
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(22)

In light of the final commitments offered by the Carriers, the Commission considers that there are no longer grounds for action on its parts. The Decision shall be binding from 7 December 2016 until 7 December 2019.

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(1)  OJ L 1, 4.1.2003, p. 1.

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