COMMISSION DECISION

of 19 October 1994

relating to a proceeding pursuant to Article 85 of the EC Treaty

(IV/34.446 - Trans-Atlantic Agreement)

(Only the Danish, Dutch, English and German texts are authentic)

(94/980/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EEC) No 1017/68 of 19 July 1968 applying rules of competition to transport by rail, road and inland waterway (1), as last amended by the Act of Accession of Greece, and in particular Article 11 (1) thereof,

Having regard to Council Regulation (EEC) No 4056/86 of 22 December 1986 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport (2), and in particular Article 11 (1) thereof,

Having regard to the application submitted on 28 August 1992, pursuant to Article 12 (1) of Regulation (EEC) No 4056/86, by a number of shipping lines and concerning an agreement concluded between them called the Trans-Atlantic Agreement (hereinafter referred to as 'the TAA'),

Having informed the notifying parties by letter of 24 September 1992, pursuant to Article 4 (8) of Commission Regulation (EEC) No 4260/88 on the communications, complaints and applications and the hearings provided for in Council Regulation (EEC) No 4056/86 (3), as amended by Regulation (EC) No 3666/93 (4), that it would examine the Agreement under the provisions of Regulation (EEC) No 1017/68 as well,

Having regard to the applications for a finding of an infringement lodged pursuant to Article 10 of Regulation (EEC) No 1017/68 and Article 10 of Regulation (EEC) No 4056/86,

Having regard to the decision taken by the Commission on 14 April 1993 to initiate proceedings in this case,

Having given the undertakings concerned, in accordance with Article 26 (1) of Regulation (EEC) No 1017/68, Article 23 (1) of Regulation (EEC) No 4056/86, the provisions of Commission Regulation (EEC) No 1630/69 of 8 August 1969 on the hearings provided for in Article 26 (1) and (2) of Regulation (EEC) No 1017/68 (5), and the provisions of Regulation (EEC) No 4260/88, the opportunity to make known their views on the objections raised by the Commission,

Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions (land and maritime transport),

Whereas:

PART I: THE AGREEMENT

I. THE PARTIES

(1) A total of 15 shipping lines are members of the Trans-Atlantic Agreement (hereinafter referred to as 'the TAA'). They are:

(2) Since 28 August 1992, the date of the notification:

- Sea-Land Service (Sea-Land),

- A. P. Moeller-Maersk Line (Maersk),

- Atlantic Container Line (ACL),

- Hapag Lloyd,

- Nedlloyd Lijnen,

- P& O Containers Limited (P& OCL),

- MSC Mediterranean Shipping Co. (MSC),

- Orient Overseas Container Line (UK) Ltd (OOCL),

- Polish Ocean Lines (POL),

- DSR/Senator Lines,

- Cho Yang Shipping Company.

(3) Since 12 March 1993 (6):

- Nippon Yusen Kaisha Line (Europe) (NYK).

(4) Since 31 March 1993 (7):

- Neptune Orient Lines (NOL),

- NYK and NOL had previously been absent from the transatlantic trade.

(5) Since 7 April 1993 (8):

- Transportación Marítima Mexicana (TMM),

- Tecomar.

TMM and Tecomar had already been involved in the transatlantic trade.

(6) Hanjin Shipping Co. Ltd became a party to the TAA on 26 August 1994, entering the transatlantic trade through a slot-charter agreement with DSR/Senator Lines GmbH and Cho Yang. This Decision is not addressed to Hanjin Shipping Co. Ltd but it should be read in the light of the fact that Hanjin has chosen to enter the transatlantic trade as a party to the TAA (see in particular, recitals 186, 261, 458, 459 and Annex II).

II. THE NOTIFIED AGREEMENT

1. Scope of the agreement

(7) The TAA became effective on 31 August 1992 and covers eastbound and westbound shipping routes between (i) on the one hand, ports in Europe situated in latitudes from Bayonne, France, to the North Cape, Norway (except non-Baltic ports in Russia, Mediterranean ports and ports in Spain and Portugal), and interior and coastal points in Europe via the said non-excepted European ports other than points in Spain and Portugal; and (ii) on the other hand, ports in the 48 contiguous States of the United States and the District of Columbia and points in the United States via the said ports.

2. Alleged objectives of the agreement

(8) According to the parties, the TAA has as its chief aim the achievement of stability on the North Atlantic trade. Given the existing excess capacity (see recital 102 for figures), the carriers maintain that stability can be achieved only by regulating the utilization of existing capacity, in order to allow them to increase freight rate levels.

3. Main aspects of the agreement

(a) General

(9) The TAA provides that its members may discuss and agree in common a vast range of subjects relating to transatlantic liner transport such as prices (on both the maritime and inland sectors), conditions of carriage and capacity (Article 5 of the TAA).

(10) The members of the TAA have an organization and rules which allow them to determine in common their policies and to put them into practice (Article 8 of the TAA).

(b) Tariff rates

(11) The members of the TAA establish their tariffs for both the maritime and inland sectors and publish them jointly. Any independent action by one of the members (the offer of a lower rate than the tariff - see recital 78) must be notified 10 days in advance to the secretariat of the TAA, which informs the other members (Article 13 of the agreement as amended).

(12) A standing 'Rate Committee' monitors the application of the objectives of the agreement in so far as they concern tariffs (Article 13 of the agreement). It is made up of the former members of the conferences established in the trade between northern Europe and the east coast of the United States (9) (i.e. ACL, Hapag Lloyd, P& O, Nedlloyd, Sealand and Maersk) plus OOCL and NYK (10). Application of those conference agreements was suspended following the entry into force of the TAA (see recital 117 et seq.).

(c) Service contracts

(13) The service contracts (11) concluded by the members of the TAA must conform to certain rules, of which the principal ones are the following:

- no contracts may last longer than one year; all contracts must terminate on or before 31 December of the relevant year,

- no contracts may be signed for annual volumes less than 250 TEU containers (20-foot equivalent units) (12). On 16 September 1993 the Commission was informed by the parties that they had lodged with the Federal Maritime Commission an amendment to the agreement lowering the limit to 200 TEU as from 1 January 1994.

(14) A standing 'Contract Committee', made up of the same members as the Rate Committee, i.e. mainly the former members of the conferences, monitors the implementation of the policy of the TAA so far as service contracts are concerned (Article 14 of the agreement).

(15) In particular, Contract Committee members can jointly negotiate and enter into collective service contracts but are not allowed to enter into individual service contracts. Non-members may negotiate and enter into contracts individually and/or jointly among themselves without prior notice. Non-members can enter into Contract Committee members' service contracts only on a case-by-case basis, subject to mutual agreement.

(d) Capacity management programme (CMP)

(16) All the parties to the TAA participate in a capacity management programme (CMP), described in Article 18 of the Agreement.

(17) For the moment, the CMP is implemented only in the westbound, i.e. Europe-United States, sector of the trade. The TAA also provides that the parties can extend the programme to the eastbound, i.e. United States-Europe, trade if they consider it necessary, but only with the prior agreement of the United States authorities.

(18) The CMP thus at present mainly affects European exports to the United States.

(19) The purpose of the CMP is to limit the supply of transport on the market without reducing the real available capacity of shipowners. To do that, shipowners have agreed not to utilize a substantial part (up to 25 %) of their available capacity.

(20) In practical terms, the members of the TAA have established for two years, by periods of three months, the real available capacity of each of them and the volume of goods that each member is authorized to carry. Thus, shipowner A, which could for example carry 10 000 TEU over three months, undertakes not to carry more than 8 000 and to pay to the TAA secretariat a fine of US $ 500 per TEU that it carries in excess of this quota. Accordingly, even if its vessel is not full, this shipowner must refuse to carry goods if it has exhausted its quota for the three-month period in question. However, it may charter slots from other TAA members if they have not reached their quota.

(21) The volumes prescribed by the programme may be revised.

(22) The CMP is therefore a capacity non-utilization agreement, or in other words an agreement to limit the utilization of capacity, rather than one which provides for a real reduction in capacity.

(e) Financial guarantee

(23) It is provided that each party must take a deposit of US $ 600 000, which may be increased. A neutral body and, in the case of the CMP, the TAA Secretariat and an auditor monitor the parties' compliance with the TAA. They may impose heavy fines if necessary in the event of non-compliance with the provisions of the TAA or the CMP [. . .] (*).

(f) Space/slot chartering and equipment exchange

(24) In addition to six vessel-sharing agreements currently in effect among various TAA parties (agreements outside the TAA framework), the TAA makes provision for additional slot-charter activity and equipment exchange. Such provisions replicate the voluntary slot-charter provisions of the Neusara and Usanera conferences.

PART II: THE TRANSATLANTIC TRADE

I. THE MARKET

(25) Generally speaking, a shipper may arrange for the carriage of his goods between a point in northern Europe and a point in the United States in one of the following three ways:

- he purchases the inland transport and sea transport services separately;

- he makes use of a forwarding agent, who organizes the inland and sea transport for him;

- he uses the services of a shipowner who can organize the inland and sea transport operations on behalf of the shipper, usually by subcontracting the inland transport section.

(26) The TAA covers containerized liner shipping services between northern Europe and the United States and inland container transport services, in Europe and in the United States.

A. Sea transport

1. Market for sea transport services

(27) The market for sea transport services to which the TAA relates is that for containerized liner shipping between northern Europe and the United States using the sea routes between ports in northern Europe and ports in the United States and Canada.

(28) To determine whether these services constitute a market in their own right, it is necessary to assess the scope for substitution between them and, on the one hand, other transport services on the same routes and, on the other hand, transport services with the same technical characteristics but offered on other sea routes. A description of the market for sea transport services therefore has to comprise both a technical analysis and a geographical analysis.

(a) Technical analysis of the service

(29) There are several types of goods transport service between northern Europe and the United States. A distinction first has to be drawn between air transport and sea transport.

(30) Because it costs a great deal more, air transport between northern Europe and the United States involves only limited quantities of high value-added goods or goods for which the transport time is a decisive factor. Compared with containerized sea transport, the volumes transported by air are much smaller.

(31) In its reply of 17 March 1994, the TAA states that, for certain categories of goods, air transport accounts for a substantial proportion of the volumes carried (between 14 and 19 %). But it does not produce any evidence that goods falling into these categories and normally carried by sea can easily be switched to air transport. It is also clear from the tables provided by the TAA (13) that, for each category of goods carried (categories which, it claims, can be switched), the average value of goods carried by air is substantially higher than the average value of goods carried by sea. It is consequently not proven that a substantial proportion of the goods carried by container could easily be switched to air transport. It seems instead that the categories of goods mentioned by the TAA include a wide variety of products some of which, according to their physical properties, could be transported economically by air while others could not. (It should also be noted that the tariff system for air transport does not discriminate between different types of goods but is based on the weight or volume of the goods: see recital 77).

(32) The Commission takes the view that air transport forms a separate market from containerized liner shipping.

(33) As far as sea transport is concerned, a distinction has to be drawn between several types of service:

- unscheduled (tramp) transport,

- scheduled (liner) transport, and

- specialized transport.

(i) Unscheduled (tramp) transport

(34) Unscheduled sea transport, commonly called tramp transport, accounts for most of the volumes carried by sea. It consists of unscheduled transport services using vessels chartered on demand (14) and, nowadays, mainly involves the bulk transport of particular categories of goods (oil, ores, cereals, etc.) for which vessels are specially equipped. The goods are homogeneous and take up all or a good part of the capacity available in the ships. The terms of contract are generally laid down in a charter-party (15) negotiated between the shipowner and the user (16).

(ii) Liner transport

- General features

(35) Scheduled sea transport, or liner shipping, accounts for the bulk of maritime transport in value terms. The supply and demand conditions are highly specific in comparison with other modes of transport.

(36) The demand is extremely varied, both in terms of the types of goods carried and in terms of the variety and number of customers (transport users). Liner shipping is particularly well suited to the carriage of goods in small or medium quantities which are not in themselves sufficient to fill a ship or a substantial part of it economically. The goods have very heterogeneous physical characteristics and values and are shipped by a large number of shippers (see Annex III, paragraph 5).

(37) The suppliers of liner transport are in the nature of 'common carriers': their transport capacity is on offer all the time, independently of any specific demand, to all transport users on a predetermined and non-discriminatory basis, at prices which are set in advance (see Annex III, paragraph 1). This type of transport is thus available to everyone on the basis of published tariffs, and the most frequently used form of contract is the bill of lading (17).

(38) There are two different types of liner transport:

- containerized liner transport, and

- conventional (or break-bulk) liner transport.

These two types of transport are sometimes substitutable.

- Containerized liner transport

(39) As their name suggests, containerized liner shipping services involve the carriage of goods by container, that is to say in boxes of standard shape and size (usually 20 feet or 40 feet long) on ships specially equipped for the purpose.

(40) Containers are carried on either 'lolo' (lift-on/lift-off) vessels, cellular vessels onto which they are loaded vertically using cranes, or on 'roro' (roll-on/roll-off) vessels, into the holds of which they are introduced horizontally on lorry chassis via access ramps (18).

(41) The supply of containerized transport services is regular and frequent (a large majority of the container carriers in the Atlantic trade offer weekly sailings). Containerization greatly reduces the risk of the goods being damaged during loading and unloading and reduces the costs of packing and insurance for the user (19). Containerization also enables the port handling, and usually the inland haulage operations, to be carried out economically and very swiftly.

- Conventional (or break-bulk) liner transport

(42) Conventional, or break-bulk, liner transport involves the non-containerized transport of a variety of goods. Ships have open holds in which consignments of goods are stacked, one by one, until they are filled to capacity. This was the most common form of liner shipping until containerization in the late 1960s. The productivity gains achieved through containerization have been so great, particularly in port handling (20), that container services have almost completely replaced break-bulk transport on the major east-west routes for all goods that can be containerized.

(43) Nevertheless, there are still today a number of goods which are either too heavy or too large to be containerized and therefore have to be shipped in the traditional manner. These are mostly certain steel or metal products or certain 'project cargoes' (prefabricated building materials).

- Conventional maritime transport according to trade

(44) In certain north-south trades such as those which have been the subject of Commission Decisions 92/262/EEC (21) (shipowners' committees) and 93/82/EEC (22) (Cewal, Cowac and Ukwal), the inefficiency of port services and the lack of land transport infrastructures erodes considerably the competitive advantages of containerized transport over conventional transport. There is therefore some substitutability in these trades between the two forms of liner transport, so that shipowners often place on these trades ships that can cater simultaneously for containerized and for break-bulk transport.

(45) Conversely, in highly developed trades such as transatlantic shipping, the two forms of transport are no longer substitutable, the trade is highly containerized, the major services are operated with ships fitted exclusively for carrying containers, and conventional (break-bulk) liner transport is now reasonable attractive only for non-containerizable goods (see Annex III, paragraph 4).

(46) Since the transatlantic trade links two highly industrialized regions of the world, it handles a particularly large share of manufactured goods, for which containers are usually the most suitable mode of transport. The exporters of these goods are furthermore likely to be particularly attracted by certain specific features of containerized transport, namely its speed, regularity and frequency, its reliability, the safety of the goods, the savings it offers on packing and insurance costs, and its suitability for multimodal transport. These aspects of containerized transport are particularly well developed in the transatlantic trade (see Annex III, paragraph 6).

(iii) Specialized transport

(47) There are also shipping operators who specialize in certain types of containerizable goods. Where a shipper has a large quantity of homogeneous containerizable goods to be carried on a regular basis and can put together the necessary quantities, it can be more economical to use specialized ships than to carry the goods by container.

(48) This type of transport (which is termed 'neo-bulk') thus involves certain categories of goods in consignments which are too large to be economically carried by container and which may themselves fill a good part, if not the whole of the vessel. They include above all steel or metal products, fertilizers, certain chemicals, forest and wood products, and motor vehicles.

(49) In this case, carriers conclude long-term contracts with one or a few large shippers and operate these specialized services regularly, but mainly on the basis of charter-parties or service contracts. This regularity, which is linked to an isolated or concentrated demand for transport services, is negotiated between specialized carriers and their customers and differs from the regularity of liner shipping services, which operate regular services independently of any specific demand and offer their services on a non-discriminatory basis to all shippers.

(iv) Substitutability analysis

(50) Tramp transport caters for goods with characteristics that differ from those of goods carried by container in much larger quantities, under contractual terms that are distinct from those governing containerized transport and with a demand structure that is completely different from that of liner transport.

(51) Conventional (break-bulk) liner transport is no longer, in the transatlantic trade, a reasonable alternative to containerized transport for almost all containerizable goods and now constitutes a separate market from that in containerized liner transport services (see recitals 42 to 46).

(52) Although it mostly handles containerizable goods, specialized (neo-bulk) transport offers a different kind of transport service from containerized liner shipping and constitutes a reasonable alternative to it only for shippers with large quantities of only a few categories of goods for which shipowners have had their vessels specially built. This form of transport is not, therefore, an alternative for the vast majority of containerized transport customers and it therefore forms a separate market from the containerized liner shipping services market.

(53) As regards liquid goods, which are cited by the TAA as being a separate type of goods (23), the analysis is the same: tank-containers are carried on container ships, such as those covered by the TAA, which belong to the containerized liner shipping sector. On the other hand, tankers are specialized ships and belong to the specialized transport sector as described above.

(54) Certain goods which may sometimes be carried by tramp or by neo-bulk vessels are none the less also attracted by the shipping lines' system of tariffs, which is very advantageous for this type of goods: by this system of tariffs which are differentiated or discriminatory according to the nature of the goods, some goods can be carried at a much lower price than that charged for most containerized liner cargoes. In certain exceptional cases, therefore, the prices offered by the two modes of transport can be similar, as the TAA states in its reply.

(55) However, such a similarity in prices can arise only for certain categories of goods and is, above all, confined to a very small proportion of containerized liner shipping users. And even if the price is similar, the types of service offered are different and, as the TAA points out in its reply (24), the customer's choice will still be largely influenced by certain distinctive characteristics of each mode of transport (regularity, speed, frequency, number of ports, date of transport, final destination and multimodal transport, volumes concerned).

(56) Consequently, even if there are a number of categories of goods that are carried in containers either in the conventional way or by specialized ship (25), this does not mean that customers wishing to ship goods of this kind can switch readily, swiftly and economically between the two modes of transport. Despite the substantial price increases it has introduced on containerized transport, the TAA has not provided the Commission with any example of a customer who has genuinely switched from containerized transport to another form of transport.

(57) The Dynamar report (26), which presents a number of carriers operating regular services on the Atlantic (27), shows that most of these break-bulk, neo-bulk or other operators do not offer an equivalent service to that of entirely containerized carriers (frequency of service (28), number of ports of call, absence of multimodal service, etc.).

(58) It consequently has to be concluded that, for the vast majority of categories of goods and users of containerized liner shipping, the other forms of maritime transport, including conventional (break-bulk) liner transport, do not offer a reasonable alternative to containerized transport services and that these services constitute a market in their own right.

(b) Geographical analysis of the service

(59) In the transport sector, services which are equivalent technically but cover different geographical areas are not normally substitutable and do not therefore belong to the same services market (for instance, a containerized service from Rotterdam to New York is not substitutable for a containerized service from Rotterdam to Hong Kong). The definition of the services market consequently has a geographical aspect here, irrespective of the definition of the geographic market, which relates to the area in which the services are marketed.

(60) The services in question are containerized liner shipping services between nothern Europe and the United States, via the sea routes between ports in northern Europe and ports in the United States and Canada.

(61) The whole of northern Europe is served by the ports there, namely, for the major east-west trades, the ports of Hamburg, Bremen, Rotterdam, Antwerp, Le Havre and Felixstowe. The United States is served by all the ports on its east and west coasts and on the Gulf coast and, for certain areas, the ports on the east coast of Canada, namely Halifax and Montreal. When examining maritime transport between Europe and the United States, the routes to be taken into consideration are therefore the sea routes between ports in northern Europe and ports in the United States and Canada.

(62) The services in question are not all substitutable on a two-for-two basis: for example, services via ports on the west coast and those via ports on the east coast of the United States are separate segments of the relevant market. Services via ports in the United Kingdom and those via the continental ports in northern Europe can likewise be regarded as separate market segments. Similarly, the Canadian ports can compete for transport services only on routes originating or ending in the north-east of the United States or in the Great Lakes region. In the case in point, however, the TAA covers all the services concerned (except for services via the Canadian ports (29)) and the conditions of competition for those services are reasonably homogeneous. All of the services concerned should therefore be considered as a market within the meaning of Article 85 of the EC Treaty.

(63) There is another maritime transport route between Europe and the United States: it links ports on the Mediterranean and ports in the United States. But possible competition from these services on the relevant market is very marginal, for the following reasons:

(64) The costs of inland haulage and the time factor limit considerably the substitutability between ports in northern Europe and ports on the Mediterranean. For shippers in northern Europe, services via the Mediterranean are not a reasonable alternative to the services concerned.

(65) In the present circumstances, competition from Mediterranean services is further reduced by the fact that the Mediterranean ports are less efficient and the services less frequent. This is why services via ports in northern Europe occasionally attract shippers in southern Europe (for example, northern Italy), whereas, conversely, shippers in northern Europe rarely use services via the Mediterranean.

(66) The Mediterranean ports offer a real alternative to the northern European ports, therefore, only for shippers located near the Mediterranean (30). These factors suggest that services through the Mediterranean ports compete only marginally and negligibly on the transport markets in question, namely between the United States and northern Europe.

2. Geographic market

(67) The geographic market is the area in which the services defined above are marketed. Thus, the European geographic market for containerized liner shipping services between northern Europe and the United States, via the maritime routes between the northern European ports and ports in the United States and Canada, consists of the catchment areas of such northern European ports.

(68) The catchment areas in question depend both on distances from the ports and on the costs of inland haulage. In the case in point, the catchment areas of the northern European ports can be regarded as covering, in particular, Ireland, the United Kingdom, Denmark, the Netherlands, Belgium, Luxembourg, most of Germany and northern and central France.

3. Conclusion

(69) The TAA states in its reply (31) that the different sources of competition must be considered collectively, and not separately, when assessing the nature of the relevant market. Such would indeed be the case if shipping operators were unable to discriminate between the different demands and if a competitive alternative in relation to part of the demand could have an impact on prices throughout the market. In the present case, however, shipping operators discriminate in particular between the different categories of goods by applying differentiated rates (see recital 77) and are therefore able to limit the effects of marginal competition for the carriage of specific categories of goods. The services described above should accordingly be considered the relevant market.

(70) The sea transport services market thus described is a field of activity in its own right with relatively uniform conditions of competition. The TAA covers it almost in its entirety (with the exception of the routes via the Canadian ports, which are not subject to United States law) and establishes rules in it for its members.

B. Land transport

(71) The land transport services that are of relevance to this Decision are containerized land transport services offered to shippers, in addition to sea transport, by the TAA members amongst others, as part of a multimodal transport operation.

(72) More specifically, these services concern the inland haulage of containers between ports in northern Europe and inland points in Europe as part of a transatlantic multimodal transport operation.

C. Organization of the sea transport market

1. Organization of services

(73) Liner shipping between northern Europe and the United States is organized on the basis of scheduled services; each scheduled service consists of a given number of vessels (four or five in general) which make continual crossings and make calls on specified dates at each port. The sailings are either return trips between northern Europe and one or more of the United States coasts (east coast, Gulf coast or west coast), or round-the-world trips in either direction.

(74) In organizing such much-used scheduled services, the shipping lines frequently have to regroup, either by sharing vessels within one and the same service, by withdrawing their own vessels and using the services of the others or by leasing space on each other's vessels.

(75) Within the TAA, all the member companies participate in such capacity-sharing agreements, in groups of two, three or four shipping lines. Such agreements, most of which pre-date the conclusion of the TAA, are separate from the price agreements or agreements limiting capacity utilization concluded between all the TAA members.

2. Traditional commercial organization

(76) Until the entry into force of the TAA, the commercial organization of the trade was traditionally based on the system of liner conferences: a number of shipping lines were linked by a conference agreement, and the other shipping lines remained independent and operated as outsiders in the trade, in competition with the other conferences. The liner conference (Usanera or Neusara, depending on whether the trade was eastbound or westbound), which has had a market share of the order of 50 % in recent years, published a tariff to be observed by all its members.

(77) A particular feature of the shipping tariffs is that they discriminate between the various products, generally on the basis of value: higher-value goods pay a higher price than lower-value goods. Prices for shipping certain goods can thus amount to five times the prices for shipping other goods on one and the same route, and in some cases even more.

(78) Business relation between a customer and a conference could be of three types:

- the customer paid the tariff charged by the conference and could have his goods shipped by the conference member of his choice,

- the customer could obtain a discount from one of the conference members, who then had to inform the other members of his 'independent rate action' (32),

- the customer could sign a service contract with the conference, under which he undertook to ship a minimum quantity over a given period, at an overall price 15 to 20 % below the tariff rate, and sometimes more.

(79) The conferences operating on the Atlantic never authorized their members to sign service contracts individually.

(80) Business relations with the independent shipping lines were similar:

- either the customer paid the independent shipping line's tariff,

- or he signed a service contract with the independent shipping line.

(81) In recent years in the transatlantic trade, independent rate action within the conferences remained relatively marginal, while the volumes transported under service contracts accounted for around [. . .] of the trade.

(82) Even in negotiations on service contracts, reference to the tariff remained very important in determining the price of the service contract.

II. ECONOMIC CONTEXT

(83) The transatlantic trade, although the smallest of the major east-west trades in volume terms, is the third-largest world trade after the transpacific and the Europe/Far East trade. It is therefore a major world trade, and a particularly important one for the European economy.

(84) By way of illustration of the size of the transatlantic trade, total trade between the European Community and the United States in 1992 amounted to ECU 73,9 billion in European exports and ECU 86,7 billion in United States exports. It is generally estimated that trade in manufactured goods accounts for 69 % of world trade in value terms. Furthermore, miscellaneous goods account for two-thirds in terms of value of the goods traded by sea (33). It would thus seem that a substantial proportion in value terms of trade between Europe and the United States is carried by liner shipping. However, the Commission does not have any precise information on the value of the goods carried in the transatlantic liner trade.

(85) In terms of volume, the direct transatlantic trade between northern Europe and the United States in 1992 amounted to approximately 1 million TEU in each direction.

A. Supply

(86) The transatlantic trade saw some growth in available capacities up to 1990: the Drewry Report of 1991 puts the increase at 4 % from 1985 to 1987 and at 12,8 % from 1987 to 1990 in the northern Europe-North America trades as a whole (34).

(87) Between 1990 and 1992 the transatlantic trade tended to decline. It is estimated that total capacities on the transatlantic trade fell by 2,4 % in the westbound sector and by 1,1 % in the eastbound sector (35).

B. Demand

(88) As far as demand is concerned, westbound traffic in the period 1987/88 was much greater than eastbound traffic: in 1988, westbound volumes between northern Europe and North America (including the Canadian east coast, but excluding the American west coast) were 27 % greater than eastbound volumes (36).

(89) From 1988 to 1992 trends in the two sectors of the trade differed: there was stagnation in the westbound sector and growth in the eastbound sector:

>TABLE>

(90) Thus, while the westbound sector was stagnating in volume terms, with a marked decline in 1991 which was partly made up the following year, the eastbound sector had relatively strong and steady growth from 1988 to 1992.

(91) The trends were as follows in 1993, according to the TAA's figures:

>TABLE>

(92) Thus, the westbound sector continued to enjoy strong growth in 1993, while the eastbound sector shrank considerably.

C. Imbalance between the eastbound and westbound sectors

(93) With the transatlantic trade initially much heavier in the westbound sector (westbound volumes 27 % greater than eastbound volumes in 1988: see point 88), the changes between 1988 and 1992 resulted in eastbound volumes first catching up with westbound volumes in 1990 and then exceeding them in 1991, creating a slight imbalance in favour of eastbound traffic. It is estimated that eastbound volumes exceed westbound volumes by 10,2 % (42) in 1991. In 1992 the recovery of westbound traffic reduced the imbalance to a gap of around 6,9 % (43).

(94) Thus, the imbalances observed in 1991 and 1992 (10,2 and 6,9 %) between the eastbound and westbound sectors of the transatlantic trade appear both transitory and fairly slight compared with the previous imbalances that existed in the trade (27 % in 1988), or compared with those in the other two major east-west world trades: in 1991 the imbalances were of the order of 25 % in the transpacific trade and of the oder of 35 % in the Far Easth trade (44).

(95) In 1993 the contrasting trends in eastbound and westbound demand caused a new reversal in the imbalance: westbound volumes exceeded eastbound volumes by 15 % (45). More precisely, the eastbound and westbound sectors were back in balance in the first quarter of 1993, and westbound volumes exceeded eastbound volumes in each of the last three quarters of the year (46). Consequently, the imbalance prevailing at the time when the TAA was established was reversed in 1993.

D. Utilization rates

(96) The rate of utilization of vessels is the ratio between the volume of demand and total capacity available. It provides a good indicator of the market situation. Since the services are regular, scheduled services, there is always excess capacity, and the rate of utilization rarely comes close to 100 %.

(97) In 1990 the utilization rates of the vessels were estimated at 60,5 % westbound and 59,4 % eastbound (47). These figures are cited by the TAA in its notification of 28 August 1992.

(98) The Drewry Report of December 1992 estimates average utilization rates in the whole of the trade between northern Europe and the United States, Canada and Mexico as follows (48):

>TABLE>

(99) These figures show a stagnation in the westbound sector and an improvement in the eastbound sector, a pattern which corresponds to that in the volumes in both sectors (see recital 90).

(100) The TAA informed the Commission that the average utilization rates of its vessels were (49):

>TABLE>

(101) These averages mask fairly large disparities. TAA members' utilization rates ranged in 1992 from [. . .] to [. . .] in the eastbound sector and from [. . .] to [. . .] in the westbound sector.

(102) The members of the TAA estimate that overcapacities in the transatlantic trade were 30 % in the westbound sector and 19 % in the eastbound sector in 1991 (50), which seems realistic in the light of the general figures provided in the Drewry Report but perhaps somewhat pessimistic in relation to the average real utilization rates of the TAA members in 1991.

(103) The Drewry Report estimates utilization rates in 1992 in the three major world trades as follows (51):

>TABLE>

(104) In the transatlantic trade, compared with the other major trades, the utilization rate in the strong sector (eastbound, 72,4 %) seems low in 1992, indicating general overcapacity. On this basis, the transatlantic trade seems to be the one from among the three major east-west trades in which overcapacities are greatest in terms of overall trade volumes.

(105) On the other hand, the utilization rate of the weak sector (westbound, 62,6 %) is of the same order as that of the other trades. The utilization rate in the westbound sector in 1992 also appears relatively normal for a weak sector when compared with the 46 % rate recorded in the eastbound transatlantic sector in 1987 (52).

(106) As far as 1993 is concerned, the TAA members' average utilization rates confirm the trends analysed above: utilization rates rose to [. . .] in the westbound sector but slipped back slightly to [. . .] in the eastbound sector (53).

E. Freight rates

(107) Analysis of freight rates is a complex matter: the rates vary very widely from one type of goods to another, and the average depends very much on the nature of the goods being shipped (see point 77) (54). Similarly, service contract prices are often quite a lot cheaper than the tariffs, and it is difficult to quantifiy their effects. Lastly, surcharges (see point 191) and inland haulage costs may exceed the sea transport costs, without any breakdown being given that would allow an analysis of the sea transport section.

(108) Nevertheless, it is generally estimated that rates fell substantially from 1980 to 1992, displaying the following trend (55):

>TABLE>

(109) On the other hand, according to the Drewry Report of 1992 (56), while freight rates seem to have fallen by 23 to 27 % between 1988 and 1991 in the westbound sector, they rose over the same period by 10 to 13 % in the eastbound sector.

(110) According to the TAA (57), revenues per TEU (58) showed the following trend:

>TABLE>

(111) That represents a fall of 20 % in the westbound sector and stability in the eastbound sector.

(112) The TAA also states that rates in the westbound sector declined steadily from 1985 [. . .] to 1992 [. . .], reaching a particularly low level in that year (59).

(113) In the period prior to the establishment of the TAA, it would thus seem, in the light of the different information available, that the stagnation in volumes in the westbound sector between 1988 and 1992 was followed by a steady fall in freight rates and that the sharp improvement in volumes in the eastbound sector during the same period allowed little or no increase in rates in that sector.

F. Financial losses

(114) The members of the TAA have stated that the excess capacities available and the steady fall in freight rates resulted in substantial losses in the transatlantic trade for all shipowners. The combined losses of the TAA members operating in the transatlantic trade in 1991 amounted, according to the TAA, to US $ [. . .], ranging from US $ [. . .] to [. . .] for individual shipping lines.

(115) For 1992 and 1993, the members of the TAA have informed the Commission of the profits or losses achieved (i) in terms of the group to which they belong, (ii) in terms of the whole of their world liner shipping activities and (iii) in terms of their liner shipping activities in the transatlantic trade (60).

>TABLE>

These losses in the transatlantic trade, expressed in terms of the volumes shipped in both sectors, are equivalent to a loss of US $ [. . .] per TEU in 1992 (61).

(116) According to the TAA these losses are the reason why the members of the TAA introduced a 'loss elimination programme' in the form of rate increases spread over the period 1993 to 1995 (62). It should be pointed out, however, that the results for the transatlantic trade are not the only factor taken into account by shipowners when deciding to introduce capacity on the Atlantic. The vessels operated on the Atlantic form part of services covering several oceans at once: of the 10 TAA services offered in January 1994 (63), four were pendulum services (including at the same time the transpacific trade) or round-the-world services. For these reasons, and for reasons of market presence and logistics (repositioning of empty containers, for example), providing a service on the transatlantic route may be considered necessary by shipowners despite certain losses in that sector.

PART III: THE ROLE OF THE TAA

I. ORIGIN OF THE TAA

A. Conferences, outsiders and Eurocorde

(117) Before the TAA entered into force, shipowners operating in the transatlantic trade were divided into those organized in conferences and those operating as outsiders.

(118) Before 1984 there were no less than nine liner conferences operating between the United States east coast and Europe. After 1984 the liner conferences operating between the United States east coast and northern Europe were, in the westbound sector, the Neusara conference and, in the eastbound sector, the Usanera conference. In 1992 these two conferences comprised the same membership, namely:

Atlantic Container Line (ACL),

Compagnie Générale Maritime (CGM),

Hapag Lloyd,

Maersk Line,

Nedlloyd,

P& OCL,

Sea-Land.

(119) In 1992 the market share of the above shipping lines in the trade between the United States and northern Europe was 52,9 % in the eastbound sector and 55,7 % in the westbound sector (64).

(120) The other main lines operating across the Atlantic in 1992 were:

OOCL,

Cho Yang Line,

DSR/Senator,

Mediterranean Shipping Company,

Polish Ocean Line,

Atlantic Cargo Shipping,

Evergreen,

Independent Container,

Lykes,

Star Shipping.

(121) All the other shipping lines operating in the trade had market shares of less than 1 % in both sectors in 1992 (65).

(122) As from 1985, the conferences were linked to a number of outsiders through the Eurocorde (66) and Gulfway (67) agreements. These agreements, which are termed discussion agreements, allowed their members to discuss prices, tariffs, contracts, and terms and conditions of transportation. However, the agreements did not directly limit the commercial freedom of the shipowners by binding decisions.

(123) In 1992 outsider membership of the Eurocorde agreements was as follows:

Evergreen,

Polish Ocean Lines,

Mediterranean Shipping Co.,

OOCL,

Lykes.

(124) The Eurocorde agreements were the subject of a detailed inquiry by the Commission. The parties to the agreement were informed, by letter dated 30 January 1992, that an exemption pursuant to Article 85 (3) was not justified. The Commission did not, however, take a decision to prohibit the agreement but merely indicated to the parties that they 'continue to be protected from Commission fines by the notification, in accordance with Regulation (EEC) No 4056/86, but otherwise continue their activities pursuant to the agreement at their own risk'.

(125) In the same letter, the Commission also wrote to the parties to Eurocorde that, 'if any significant change in the market situation occurs before then (for example, in the membership of the North Atlantic Conferences, or in the parties to the Eurocorde agreements or in the market as a whole, or if any further restrictive arrangements are entered into including the conclusion of a stabilization agreement limiting or reducing the capacity in the trade), the position will be reconsidered in the light of the circumstances at the relevant time'. By 'stabilization agreement' the Commission meant specifically any agreement such as the TAA agreement.

B. The genesis of the TAA

(126) However, the shipowners did not consider the Eurocorde Discussion Agreements to be sufficient to impose the necessary discipline on the trade, in order to achieve rate increases which would satisfy both conference and non-conference members.

(127) Since 1990 if not earlier, conference lines and independents in the north Atlantic have met to discuss the limitation of vessel capacity in the trade (68).

(128) The desirability of a new basis of understanding beyond the possibilities of the Eurocorde agreements has been stressed by the north Atlantic lines' managers since 1990.

(129) Karl Heinz Sager, the chairman of Senator Line (a formerly independent line belonging neither to the conferences nor to the Eurocorde agreements, but now a member of the TAA), has consistently defended the need for a new structure in liner shipping, bringing together conference and non-conference lines such as Senator Line (69).

(130) According to Mr Sager, the new structure should be of a different nature from the traditional conference agreements.

(131) The economic problems encountered in 1991 and 1992 (described in recitals 114 to 116) prompted the shipowners to discuss and implement this type of stabilization agreement, hitherto unknown in the transatlantic trade but already tried out in the Pacific.

(132) The conference members and a number of non-conference carriers thus concluded an agreement of the new type, the TAA, which goes beyond the previous flexible forum for discussion (created by the Eurocorde and Gulfway agreements) by adding a capacity management programme as a supplementary tool to increase rate levels.

C. The two types of members

(133) One of the main features of the TAA agreement, a product of the history of the transatlantic trade and evident both in the agreement itself and in the current practice of the TAA, is the existence of two types of member within the TAA.

(134) Regrouping such a proportion of the trade within one and the same agreement was impossible under a conference agreement because some of the constraints traditionally imposed by the conference agreements were difficult for the former non-conference carriers to accept.

(135) It is for this reason that, even inside the TAA, the former independents have been given more freedom than the former conference members in respect of tariff rates and service contracts (70).

(136) According to documents of the TAA itself (71), all former conference members constituted the 'structured members', whereas the former independents remained 'unstructured members'. The structured members are parties to the 'Rate Committee' and to the 'Service Contracts Committee'.

(137) Two other members (OOCL and NYK), which did not participate in the Usanera and Neusara conferences, joined these two committees, for the following reasons: for its part, OOCL was until 1992 an independent carrier and operated its own vessels in the transatlantic trade; shortly after the introduction of the TAA, OOCL withdrew its vessels from the trade and rented space on the vessels of Sea Land, P& O and Nedlloyd, who are structured members; consequently, the status of unstructured member was no longer justified in the case of OOCL, which took its place alongside the former conference members within the committees. For its part, NYK did not operate in the Atlantic in 1992 but is generally a member of the conferences in the trades which it services (72).

(138) One of the differences between structured and unstructured members was the means of taking independent action (IA), i.e. applying tariff rates lower than those of the tariff of the TAA. Structured members had to give 10 days' notice, while unstructured members were under no such obligation.

(139) Following a letter sent by the Commission on 27 August 1992 explaining why the TAA's structure prevented it from benefiting from the block exemption granted to conferences, one of the reasons being the different rules govering IA, the TAA modified the agreement in December 1992 as regards the period of prior notice. Now all TAA members have to give 10 days' prior notice for IA (73).

(140) There is, however, still evidence that the TAA provides for two kinds of members and different price levels. Firstly, TAA documents show that (i) unstructured members have been directly allowed to underquote structured members by US $ 100 per TEU (74) and (ii) all TAA members have agreed that unstructured members will, if necessary, use independent action to establish rate differentials (75).

(141) Secondly, structured members may not conclude individual independent service contracts, whereas unstructured members are allowed to do so, which gives them much greater room for commercial manoeuvre.

(142) Thirdly, unstructured members may in certain circumstances take part in a service contract negotiated by the Service Contract Committee, whereas structured members may not take part in service contracts negotiated by unstructured members.

(143) Fourthly, transport rates are sometimes different for structured and unstructured members under the same service contract (76).

(144) The TAA thus gathers former conference members (who adhere to standard north Atlantic conference practices) and independents wishing to maintain price flexibility within a framework allowing rate levels to increase for the benefit of both types of parties to the TAA.

II. THE MARKET POWER OF THE TAA

A. Market shares of the TAA

(145) As defined in recital 27, the relevant market embraces both the trade through United States ports and the trade to the United States via Canadian ports. However, most statistics relate to the direct transatlantic trade, i.e. that via United States ports. The TAA's market shares in the direct transatlantic trade will therefore be given first, and the impact of volumes passing through the Canadian ports on the TAA's market share in all the trades concerned will then be estimated.

(146) The members of the TAA held the following market shares in the direct transatlantic trade covered by the geographic scope of the agreement:

Market share of the TAA lines in the direct transatlantic trade in the period 1991 to 1993 (77)

> TABLE POSITION>

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(147) According to figures supplied by the TAA (81), the volumes of the trade between the United States and Europe passing through the Canadian ports in 1993 accounted for 7,8 % (7,8 % in the westbound sector and 7,8 % in the eastbound sector) of the total volumes shipped between the United States and Europe. The TAA members estimate that between 80 and 90 % of these volumes passing through the Canadian ports are carried by companies which are not members of the TAA. It can therefore be estimated that the shares in the whole of the market in question held by the TAA members were approximately 75 % in 1991 and 1992 and between 65 and 70 % in 1993 (on the basis of the data given in point 146, their share in 1993 was 67,5 % in the westbound sector and 70,4 % in the eastbound sector).

B. The independent companies which are not members of the TAA

(148) According to FMC Statistics (82), the market shares in 1992, on the direct routes between the United States and northern Europe, of the only companies to remain independent of the TAA were as follows:

>TABLE>

(149) These statistics show that the principal independent company which is not a member of the TAA is Evergreen. In 1993 Evergreen was the second largest shipping line in the world, and, of the companies outside the TAA, is the only one to have very large capacity, the necessary financial power, a commercial presence on the market in question and a global network allowing it to expand on this route. Evergreen is therefore in a much better position to exert some competitive pressure on the TAA than the other companies that are not members of the TAA.

(150) Evergreen accounted for 7 to 8 % of the direct transatlantic market in 1992, which, according to the above figures, would leave between 10 and 13 % for all the other independent shipping companies that are not members of the TAA on the trade via the United States ports.

(151) Evergreen is a member of the Eurocorde Discussion Agreement. That agreement allows discussions between Evergreen and the members of the TAA who are also members of the EDA (including those who are members of Neusara and Usanera: see recitals 118 and 123) on a vast range of subjects, in particular freight rates and general conditions of transport.

(152) In spite of the Commission's letter referred to in recital 124, TAA members which are also members of the EDA intend to maintain the latter agreement in operation alongside the TAA, in order to discuss freight rates and other conditions of transport with Evergreen and possibly other non-TAA member shipping lines, bearing in mind that EDA is an open membership agreement.

(153) Evergreen does not offer certain specialized equipment (open top, flat top) in the transatlantic trade and does not amount to a real alternative to the TAA for shippers whose goods need such equipment.

(154) Evergreen was associated with numerous working parties on the setting-up of the TAA, was initially supposed to participate in the agreement, and exchanged some information on available capacity with the future members of the TAA.

(155) Although Evergreen remained independent of the TAA, it maintained regular contacts on respective strategies with some TAA members and was very well informed of the TAA's policy on prices, with the consequences for Evergreen's tariffs described in recital 215.

(156) Lykes is a much smaller company than Evergreen, operating mainly in the trade between northern Europe and the United States Gulf Coast. It is also a member of the Eurocorde and Gulfway agreements [. . .] (83).

(157) The other shipping lines which are independent of the TAA are very much smaller in size, have relatively small market shares in the transatlantic trade (except in some cases in certain sectors of the market) and cannot always offer sufficiently frequent services. They do not therefore have the capacity to exert any real competitive pressure on the TAA.

(158) The following shipping lines are engaged in the trades via the Canadian ports: Cast, Canada Maritime and Balt Canada Line. According to the TAA, these companies account for between 80 and 90 % of the trade to or from the United States via the Canadian ports and together took less than an 8 % share of the total trade in the relevant market in 1993.

(159) Cast and Canada Maritime, which thus each hold less than 3 or 4 % of the relevant market, are members of the existing conference on the trades between Canada and northern Europe, to which four members of the TAA (OOCL, POL, ACL and Hapag Lloyd) also belong. This conference is competent for the trades to or from points in Canada but not for the trades to or from the United States via Canadian ports.

(160) However, in examining the competitive behavior of Cast and Canada Maritime on the relevant market, account has to be taken of the close cooperation on rates between these companies and the four TAA members that belong to the conference on the northern Europe-Canada trade. It is unlikely that these two companies which have undertaken to offer conference rates in common with the four abovementioned TAA members for shipping containers between ports in northern Europe and Canadian ports to destinations in Canada could adopt radically different behaviour in charging for the same maritime transport but for goods originating in or destined for the United States.

(161) In addition, part of the volumes carried by Cast and Canada Maritime on the market in question via the Canadian ports is handled by merchant haulage: only the maritime section of the journey is the responsibility of the shipowners, with the result that the rates charged for such services fall under the authority of the Canadian conference, in which there is a majority of TAA members.

(162) It has to be concluded therefore that, because they belong to the conference on the trades between northern Europe and Canada, the companies Canada Maritime and Cast are not in a position to exert effective competitive pressure on the TAA in the relevant market.

(163) This analysis is confirmed by the evidence set out in recital 218, indicating that there is some cooperation between a TAA member and the two members of the Canadian conference which do not belong to the TAA as regards the rates applied in the trade to and from the United States.

(164) The third company, Balt Canada Line, has much smaller capacities still than those of Cast and Canada Maritime, and therefore holds a very small share of the relevant market.

C. Potential competition

(165) The TAA underlines the importance of two sources of potential competition (84):

- carriers already present on the Atlantic and capable of expanding the containerized services they offer,

- containerized shipping operators who are absent from the Atlantic but capable of entering that market.

(166) As to the first source of potential competition, the TAA refers to the conventional carriers (break-bulk) and to what it calls specialized operators (among whom it includes neo-bulk, roro and specialized tankers) present on the Atlantic, and bases its arguments on estimates of the container volume that these carriers could offer if they switched their traditional services to containerized services. Nevertheless, the TAA does not state how much conversion of their services would cost or how long it would take, or whether the services thus converted would then be economically competitive with the specialized container ships operated by TAA members.

(167) The transatlantic trade, like the other two major east-west trades, is a very high-volume trade and is serviced by regular, high-capacity services, so much so that the major world operators tend more often than not to group together in order to operate them jointly (for instance, the P& O, Nedlloyd and Sea Land services, and the NYK, Hapag Lloyd and NOL services).

(168) In such trades, in order to operate competitive services, shipping lines must have a sufficient number of large, modern vessels.

(169) It is therefore highly unlikely that the non-containerized operators could, even if they were to increase their supply of container transport, offer services that could compete with the major operators of containerized liner shipping.

(170) It is also clear from the information supplied by the TAA that the vast majority of the operators in question offer only monthly or fortnightly services, whereas, according to the TAA, a weekly frequency is an essential component of service quality. These services likewise call at only a limited number of ports in northern Europe or the United States. Even if these services were converted to carry containers, they would not, therefore, be capable of exerting real competitive pressure on the containerized liner services.

(171) This conclusion is borne out by the following analysis: potential competition has an economic effect inasmuch as, if transport prices were to rise above the level at which they were competitive, new operators could be expected to enter the market without delay. The differentiated rating system applied in sea transport means that some goods cost considerably (two, three or even five times) more to ship than others. It is highly probable that the price paid in order to ship such goods includes a large profit element and helps to subsidize the carriage of goods which are less profitable to the shipowners.

(172) If the non-containerized operators mentioned by the TAA exerted effective potential competition on the market, then they would be permanently interested in transporting such profitable goods and they would convert part of their ships so as to offer the appropriate capacity and cream off the top of the market, with the result that the differentiated rating system applied would be very difficult to maintain; the fact that the operators already established on the Atlantic but offering non-containerized services do not have a significant presence on the most profitable fringe of the relevant market is clear evidence that they do not exert effective potential competition on the market in containerized liner transport.

(173) The potential competition exerted by containerized liner shipping companies absent from the transatlantic trade is of a different kind. One of the peculiarities of the maritime transport sector often referred to is the mobility of fleets and therefore the ease with which trades can be penetrated by new entrants. This is mentioned in the eighth recital to Regulation (EEC) No 4056/86: 'the mobility of fleets, which is a characteristic feature of the structure of availability in the shipping field, subjects conferences to constant competition which they are unable as a rule to eliminate as far as a substantial proportion of the shipping services in question is concerned' (emphasis added).

(174) Two factors should here be taken into account in the case in point: the special features of the transatlantic trade and the special features of the agreement in question.

(175) As stated earlier, the transatlantic trade is a very high-volume trade and, if they are to be competitive, operators in this trade have to offer regular, high-capacity services using a sufficient number of large, modern ships specialized in container transport. The major world operators group together in order to run joint services: of the TAA's 10 scheduled services, only the Maersk service is operated individually, the other nine being covered by vessel- and capacity-sharing agreements.

(176) Although it is easy to place ships on this trade, very few can exert effective potential competition since only a few large international shipowners, or possibly certain large groups of shipowners, are at present able to provide sufficient suitable capacities in the trade to exert any real competition in it.

(177) However, of the few major world shipowners not operating in the transatlantic trade, most have close links with certain TAA members in operatin services in other trades. Annex II contains a non-exhaustive list of agreements between the major, non-TAA international operators in the other two main east-west trades, namely the transpacific and Europe-Far East trades.

(178) More particularly, the participation of almost all these operators in the EATA and TSA stabilization agreements, which are similar to the TAA in terms of the freezing of capacities, shows the propensity of such companies to enter into TAA-type agreements in the trades in which they operate. It also shows that they have a mutual interest in not exerting competition which might destabilize the TAA-type agreements in force around the world (see also the Lloyds List article quoted in Annex II).

(179) The TAA is furthermore a different kind of agreement from a conference, in that it enables unused excess capacities to be artificially maintained in the trade and it offers a flexible framework for fixing rates.

(180) Potential competition is effective only if the entry of a new operator constitutes a credible threat, in other words if a new entrant has a reasonable chance of making profits on the market and being able to leave it without incurring excessive costs. By maintaining excess capacities in the transatlantic trade while raising rates, the TAA creates conditions in which the arrival of new capacities in sufficient quantities to exert real competition would be liable to aggravate the excess capacities and to force down rates rapidly to unremunerative levels, thereby immediately making the new entrant's activities unprofitable.

(181) The maintenance of excess capacities thus reduces the incentive to penetrate a market, even if it is momentarily profitable, and thereby limits the pressure of potential competition. Through the CMP, the members of the TAA wield considerable market power and are therefore in a position to exert pressure that can deter a potential competitor.

(182) The other necessary condition for potential competition to be effective is that any shipowner able to enter the trade should also be able to leave it without losing too much money. Withdrawal from a major trade such as the transatlantic trade would damage the commercial reputation of a large shipowner and substantially affect his competitive position in other trades. It would also reduce his future prospects of returning to the trade if demand picked up in it. The costs of withdrawing from the market can thus reduce the incentive for a shipowner rapidly to enter a new trade.

(183) Furthermore, unlike the exempted liner conferences, the TAA provides a price-fixing framework that is flexible enough to permit the integration of outsiders and new entrants.

(184) For these reasons, the possibility of an independent shipowner introducing new capacity in sufficient quantities in the trade outside the TAA is remote; the structure of the TAA makes it more likely that shipowners interested in the transatlantic trade would seek to enter it within the framework of the TAA and share capacity with those operators already present.

(185) Indeed, that is what two large Asian shipowners (NKY and NOL) did when they entered into the transatlantic trade in March 1993. They did so within the framework of a joint service with Hapag Lloyd, inside the TAA. This type of entry is not likely to exert any further effective competition against the TAA.

(186) Finally, two Mexican shipowners, already operating in the transatlantic trade, joined the TAA in April 1993 within the framework of another joint service with Hapag Lloyd.

(187) These various points provide a basis for a cautious analysis of the notion of potential competition in the transatlantic trade and go some way towards explaining why the increases introduced by the TAA since 1 January 1993 and the dissatisfaction which this has created amongst the shipping lines' customers have not so far prompted the arrival on the market of any new operators offering real competition against the TAA.

(188) Clearly, although the special features of the transatlantic trade and of the TAA substantially reduce the impact of potential competition, they do not eliminate it altogether, and account should also be taken of the possibility of new entrants in the trade between northern Europe and Canada, which could have an impact on some segments of the market in question. On the other hand, a new entrant in the trade between the Mediterranean and the United States would not be likely to exert real pressure on the relevant market.

III. THE IMPACT OF THE AGREEMENT

(189) The members of the TAA have been able to impose very substantial changes in the structure of liner shipping prices across the Atlantic and, at the same time, considerable increases in the general level of freight rates.

A. The impact on the structure of prices

(190) Until the implementation of the TAA, commercial relations were organized in the manner described in recitals 78 and 80.

(191) In particular, the prices in service contracts could include inland sectors, container service charges (CSC), maritime transport as such, terminal handling charges (THC), the currency adjustment factor (CAF), and the bunker adjustment factor (BAF), as well as other charges.

(192) No limit was imposed as to the minimum quantity for which shippers could enter into service contracts; service contracts existed for annual volumes as low as 20 TEUs i.e. 20 containers of 20 feet or 10 containers of 40 feet.

(193) Finally, the price invoiced varied according to the nature of the goods carried and was fixed on the basis of a highly complex schedule of tariffs.

(194) The implementation of the TAA has led to its members' substantially modifying their tariff structure on the transatlantic trade (85).

(195) Firstly, the categories of products have been rearranged and the tariffs relating thereto have been regrouped into 26 classes (86). The tariffs themselves have been modified but, because the structure has changed, it is necessary to analyse them on a case-by-case basis to determine the size of the increases.

(196) Secondly, service contracts for the members of the Contract Committee, which includes the majority of TAA members, are negotiated jointly by Contract Committee members and are usually offered to customers via the secretariat of the TAA. This secretariat proposes service contracts specifying, where appropriate, the quantities which must be carried by each of its members (87). Shipowners who are not members of the Contract Committee can participate on a case-by-case basis in a contract of the Contract Committee and may negotiate individually (88).

(197) Thirdly, the members of the TAA no longer accept service contracts for annual quantities of less than 250 TEU (89) and shippers below this level are therefore generally obliged to pay the tariff, which is more expensive than a service contract (90).

(198) Fourthly, service contracts are now proposed on the following basis:

- port-to-port transport,

- CAF,

- THC,

- CSC,

- inland transport.

(199) The main difference from the previous system lies in the fact that shipowners no longer guarantee the amount of the surcharges (CAF, THC, CSC, inland transport) and, instead, indicate that these are liable to change during the period of the service contract (91).

(200) Fifthly, port classification has changed; ports in Scotland, the North of England and Denmark lose their classification as 'Base Ports', and the cargoes which pass through them are subject to a supplementary charge (arbitrary or range additionals) (92).

B. The impact on the level of rates

(201) One of the objectives of the TAA in the autumn of 1992 was to introduce on 1 January 1993 increases ranging between US $ per 20-foot container and between US $ per 40-foot container (93).

(202) Given the complexity and the variety of the changes made, the influence of the TAA on prices can be analysed only on a case-by-case basis.

(203) When the increases were introduced in December 1992 and January 1993, a large number of shippers were faced with very large price rises, generally between 30 and 100 %, but in one case amounting to as much as 175 %.

(204) In addition, the TAA sought to impose these very large increases in a particularly short space of time compared with the usual practices in the trade. For example [. . .] complained to the Commission about the conditions and deadlines imposed on them by the TAA for the price increases (94).

(205) Following complaints from the shippers and the initiation of proceedings by the Commission against the TAA, a number of these price proposals were revised downwards, but the increases actually inplemented are nevertheless very substantial compared with 1992.

(206) The TAA has provided details on the trend of rates since 1989 for goods representing a little under 40 % of the volume of westbound trade so as to demonstrate that the increases introduced in relation to 1992 were merely a return to the 1989 level (95).

(207) None the less, for the abovementioned goods, the 1993 increases over 1992 are as follows:

Change 1993/92

Beer [. . .] [. . .]

Chemicals [. . .] [. . .]

Paper [. . .]

Spirits [. . .] [. . .]

Motor vehicle parts [. . .]

Steel cables [. . .]

Tyres [. . .] [. . .]

(208) In addition, in its reply to the statement of objections of 14 April 1993, with reference to the complaints lodged with the Commission, the TAA indicates that the increases imposed may, for certain shippers and certain products, range up to:

[. . .].

(209) A number of shippers were faced with very large increases and were able to find alternatives through the Mediterranean or through the few lines competing with the TAA, but in most cases they had to accept substantial rate increases there too (see, for example, recitals 215, 218 and 219).

(210) It is apparent from these figures that the TAA managed to impose a very large, general increase in freight rates compared with 1992 in the Europe-United States sector. Even if, as the TAA members claim, the increases were necessary in order to offset losses and return to the rate levels which had previously applied, the TAA brought about a very substantial change in the market and its effects are considerable.

(211) For 1994 the TAA has announced further increases of between US $ 40 and 160 per TEU over the 1993 rates in the westbound sector.

C. Effect on the market

(212) These very large increases made by the TAA have obviously had major repercussions on the direct transatlantic trade and on neighbouring markets.

(213) Confronted in 1993 with significant increases in freight rates charged by the TAA at relatively short periods of notice, shippers have sought to switch to the other alternatives available.

(214) The few independent lines have thus been able to benefit from the shock created by the TAA's price increases to gain market shares while at the same time substantially increasing their tariffs. Evergreen (Taiwan) in particular saw its market share in the direct westbound trade rise from 7 % in the first quarter of 1992 to 13,8 % in the first quarter of 1993 (96).

(215) At the same time, Evergreen amended its schedule of tariffs in line with the changes made by the TAA and introduced rate increases comparable to, but slightly lower than, those made by the TAA so as to safeguard its competitive position.

(216) The TAA, for its part, has lost several percentage points of market share in the westbound sector. The members of the TAA had a market share of 71 % in the first quarter of 1993, as against 78 % in the corresponding period in 1992 (97).

(217) As regards the trade through Canada, which can exert some competitive pressure on certain market segments, the Commission has information suggesting that there is some cooperation between the TAA and the Canadian conference aimed at limiting still further the real competitive impact of the trade through Canada.

(218) One of the TAA members sent the two members of the Canadian Conference that are not TAA members details of the tariff structure changes and the calculation methods used by the TAA for the increases to be introduced on 1 January 1993 (98). The information was transmitted with sufficient notice to enable the Canadian Conference to introduce similar increases. The Canadian Conference also informed shippers of a new schedule of tariffs, changes to the system of port tarification and substantial increases in service contract rates, all of which resulted in conditions that were very similar to those on offer from the TAA, to enter into force on 1 February 1993 (99).

(219) The effects of the TAA have also made themselves felt in the trade through the Mediterranean: the Seusa conference covering the trade from the Mediterranean has altered its tariffs along the same lines as the TAA and has introduced a number of significant increases. Four of the eight members of that conference also belong to the TAA (Maersk, Nedlloyd, P& O and Sea-Land).

(220) The trade through the Mediterranean has also benefited from the increases imposed by the TAA since the trade to the United States passing through the Mediterranean grew by 14 % between the first quarters of 1992 and 1993, whereas it increased by 9 % through the northern European ports. Some shippers, more particularly those based in the south of France catchment area, have decided to switch all or part of their cargoes to the Mediterranean ports because of the increases imposed by the TAA. However, this alternative is not possible for the very large majority of shippers in northern Europe affected by the TAA.

(221) As far as the Commission is aware, for the very large majority of shippers, the trade no longer offered any real alternative to the TAA in 1993, since the few independents operating in the trade were running at virtually full capacity and were no longer able to accommodate any additional transport demand.

D. The effect of the capacity management programme (CMP)

1. Arguments put forward by the TAA to justify the CMP

(222) In their notification of the agreement, the TAA members explained that the capacity management programme was intended to deal with the problem of the imbalance between eastbound and westbound volumes and hence of the excess capacities created in the westbound sector. Accordingly, the CMP was implemented only in the westbound sector, although the TAA members reserved the right in their agreement to extend it to the eastbound sector.

(223) In their reply of 17 March 1994, the TAA members explained that:

- one of the aims of the TAA was to rationalize the trade by physically withdrawing excess capacities,

- the CMP was indispensable if the rationalization programme was to be implemented,

- the CMP also served to tackle the problems of eastbound/westbound imbalances, seasonal fluctuations in demand and cyclical excess capacities.

(224) Each of these arguments comes up, however, against the following difficulties:

2. Rationalization of the trade

(225) As regards rationalization through the physical withdrawal of capacity, the Commission notes the following:

a) rationalization as an aim of the TAA.

(226) With regard to rationalization of the trade through the physical withdrawal of capacity, the TAA, in its reply of 17 March 1994, refers to a document dated 13 January 1992 as proof that such rationalization was one of its aims.

(227) That document was not brought to the Commissions's attention by the members of the TAA but was seized by the Commission during a check on a shipowner outside the TAA. On a more general level, rationalization of the trade was not mentioned by the TAA on its formation as being one of the objectives of the agreement, and when the agreement was notified to the Commission in August 1992 rationalization was not one of its stated aims.

(228) The TAA members have, moreover, never informed the Commission, either in the notification or during the proceedings, about a programme for future rationalization of the trade. The Commission was informed retroactively of the rationalization measures taken by some of the TAA members.

(229) Not only has no agreement between all the members of the TAA concerning a physical withdrawal of capacity been notified to the Commission, but above all the TAA members stated in their notification of 28 August 1992 that one of the aims of the TAA was to avoid the physical withdrawal of capacity:

'[. . .] under the Agreement, there is no provision relating to the physical withdrawal of capacity [. . .]' (100);

'That regulation (of excess capacity, provided by the TAA) nevertheless ensures [. . .] that no existing capacity is withdrawn permanently from the market' (101).

(230) of an increase in the amount of excess capacity, the adjustments provided for by the TAA agreement relate to the level at which capacity will be maintained and are not intended to lead to rationalization programmes.

Lastly, the capacity maintenance programme notified to the Commission allows for an unchanging proportion of excess capacity of approximately 20 % over two years (see recital 244). Clearly, therefore, when the notification was made the TAA members did not have any capacity withdrawal programme, as it would have had to be taken into account in the capacity maintenance programme. It was only ex post facto, after some capacity had been withdrawn by a few TAA members, that the capacity maintenance programme was modified (see recital 246).

(231) These various points provide a basis for concluding that the TAA members did not regard rationalization of capacities as one of the major objectives of the agreement, nor did they enter into their agreement with the aim of rationalizing the trade through substantial physical withdrawals of capacity;

(b) the CMP, a necessary means of rationalization

(232) The TAA explains in its reply of 17 March 1994 that the CMP is a necessary means of rationalizing the trade by withdrawing capacities.

(233) First, the Commission is not convinced that the introduction of sales quotas such as the CMP is in general necessary for the purpose of reducing excess capacities. On the contrary, such quotas permit as a rule the maintenance of excess capacities at the expense of clients or consumers (102).

(234) Secondly, it is clear from the explanations given by the TAA and from the history of the trade that capacity has been and can be physically withdrawn through capacity exchange or chartering agreements between a small number of shipowners (of the order of two to four) (103).

(235) This is what the TAA explains in a reply dated 15 July 1993 to a question by the Commission concerning precisely the links between the TAA and the rationalization measures undertaken. The TAA states in this connection merely that a framework for cooperation, in particular on rates, facilitates the implementation of such capacity-exchange agreements between certain members. No reference is made to the CMP in that reply.

(236) Lastly, in its reply of 24 May 1993 to the statement of objections on interim measures (Annex 6), the TAA outlines the different rationalization measures taken by shipowners between 1987 and 1993, i.e. both before and after implementation of the TAA. Reference is made to decisions taken individually by shipowners or to capacity-exchange agreements between a small number of shipowners, but nowhere is there any mention of a concerted decision by all the members of the TAA.

(237) The TAA explains in its reply of 17 March 1994 that the CMP ist necessary for the purpose of rationalization as it ensures the maintenance of the market shares of the operators who withdraw ships. First, the maintenance of the market shares of all operators, including those who have cause to rationalize their services, is not prima facie a prerequisite for the regulation of supply and demand; secondly, and more importantly, the capacity-sharing agreements referred to above enable operators who withdraw ships to maintain a commercial operation and hence their market share irrespective of any CMP. This argument put forward by the TAA is therefore not valid.

(238) In the light of the above considerations, there is no evidence that the TAA (and in particular the CMP) has been a necessary means of rationalizing the trade through the physical withdrawal of capacities.

(239) With regard to the other arguments in support of the CMP concerning eastbound/westbound imbalances, seasonal fluctuations and cyclical excess capacities, account should be taken of the facts set out below.

3. Eastbound/westbound imbalances

(240) The TAA argues that the application of the CMP to the westbound sector alone is justified by an imbalance of the order of 10 % in 1991 (see recitals 93 and 94). However, as we have seen, this sort of imbalance was usual in liner shipping and was indeed fairly limited in scale compared to historical patterns and other trades. It does not in itself justify supply-limiting arrangements that may exceed 20 %.

(241) As has been noted, moreover, the imbalance has been diminishing since 1992 and disappeared in 1993 (see recital 95). Indeed, the imbalance has been reversed, with westbound volumes exceeding eastbound volumes by 14 and 37 % in the second and third quarters of 1993 respectively.

(242) It is difficult in such circumstances to understand the economic point of the CMP in the westbound sector alone. The emergence of an imbalance to the disadvantage of the eastbound sector in 1993 did not lead to the introduction of a CMP to deal with it. The argument that the CMP is justified by an imbalance in the eastbound and westbound sectors thus seems weak in respect of 1991 and 1992 and unfounded in the case of 1993.

4. Seasonal fluctuations

(243) If the CMP was intended to deal with seasonal fluctuations in demand, fluctuations that could not - according to the TAA - be matched by corresponding fluctuations in installed capacities, then the proportion of excess capacities maintained should follow the seasonal trend in demand.

(244) According to the TAA, demand is traditionally weakest in the first quarter and strongest in the fourth quarter in the westbound sector. However, the proportion of excess capacities maintained initially by the TAA (as communicated to the Commission when the TAA was notified on 28 August 1992) was as follows in the successive three-monthly periods following entry into force of the agreement:

- first period: [. . .]

- second period: [. . .]

- third period: [. . .]

- fourth period: [. . .]

- fifth period: [. . .]

- sixth period: [. . .]

- seventh period: [. . .]

- eighth period: [. . .].

(245) The initial capacity management programme was therefore in no way intended to follow seasonal fluctuations in demand.

(246) The TAA subsequently revised the capacity management programme, perhaps because volumes had been rising and real capacity cuts had taken place. On 16 June 1993 the TAA supplied the following programme (104):

- first period: [. . .]

- second period: [. . .]

- third period: [. . .]

- fourth period: [. . .]

- fifth period: [. . .]

- sixth period: [. . .]

- seventh period: [. . .]

- eighth period:. [. . .]

(247) This programme does not seek to keep pace with developments of a seasonal nature either. It is clear, therefore, that the TAA is not an instrument designed to deal with seasonal fluctuations in demand.

5. Cyclical excess capacities

(248) In point 87, it was stated that the trend since 1990 has been for a reduction in supply ( P 2,4 % westbound between 1990 and 1992). Between 1 September 1992 and 1 January 1994, some members of the TAA, acting independently of the agreement proper, withdrew or rationalized capacity of their own, and total TAA capacity fell by approximately [. . .] as a result (105).

(249) As far as the Commission is aware, overall capacities in the transatlantic sector fell several percentage points between 1991 and 1993.

(250) On the demand side, volumes in the westbound sector grew by 9,1 % between 1991 and 1992 and by 11 % between 1992 and 1993, giving an increase of around 20 % over the period 1991 to 1993.

(251) Thus while westbound transatlantic trade dipped in 1991, volumes climbed back in 1992, and in 1993 reached their highest level for more than seven years (106). The TAA has not explained how this situation can be described as one of cyclical excess capacity.

(252) In addition, the TAA states that there was 30 % excess capacity in 1991. With volumes increasing by 20 % between 1991 and 1993, and capacities falling at the same time, the Commission fails to see how the excess capacity in the trade in 1993 can be described as cyclical.

(253) It has not been shown, therefore, that the CMP is an instrument designed to deal with cyclical excess capacities.

6. Conclusion regarding the CMP

(254) In the light of these various aspects, the CMP as it operates today does not appear to be a specific means of dealing with a crisis caused by an imbalance in EB/WB trades and excess capacities in the WB sector, or even of allowing a rationalization of the trade to be carried out, but rather as a tool intended to maintain unused capacities artificially and to raise artificially the level of freight rates in the westbound sector.

(255) This is indeed what the Drewry Report anticipated in 1992: assuming that the CMP would be maintained in the westbound sector, it forecast the following trend for average rates:

>TABLE>

(256) Implementing the capacity management programme (CMP) in the westbound sector alone does not thus seem justified in the light of the economic facts of the trade. It allows shipping prices from Europe to the United States to be artificially increased and imposes extra costs on European firms exporting to the United States.

(257) Some of the arguments put forward by the TAA to justify the CMP might possibly apply to the trade from the United States to Europe in 1993, but they certainly do not apply to the trade from Europe to the United States.

E. The European fleet

(258) One of the arguments put forward by the TAA members in support of their agreement is the defence of the European fleet: they contend that the first shipowners to suffer from any prohibition of the TAA by the Commission would be the Europeans.

(259) The proportion of the world liner fleet belonging to European shipping lines has been declining significantly for many years, while the share held by Asian companies has been growing rapidly. Of the 20 largest world shipping lines in 1992, six were European, accounting for 27,6 % of capacities, whereas nine were Asian shipping lines, accounting for 48,2 % of capacities operated (107).

(260) In the transatlantic trade, European companies have kept a slightly larger share of the market: in 1992 Community shipping lines accounted for about [. . .] of the volume of the TAA (108), equivalent to about [. . .] of the total volume of the transatlantic trade. If the non-Community European shipping lines are included, European shipping lines as a whole accounted for some [. . .] of the volume of the TAA in 1992, equivalent to about [. . .] of the total volume of the transatlantic trade.

(261) Thus, the European shipping lines are in a relatively better position in the north Atlantic than in the rest of the world. The main advantage which the TAA procures for the European shipping lines is the increase in rates which has been imposed and, as a result, the reduction or elimination of the losses suffered in 1992 in this market. However, even if the Community lines are able to derive benefit from the rate increases introduced by the TAA, they do not benefit any more or any less than the non-Community members, which now account for 10 out of the 15 members of the TAA and about [. . .] of TAA capacity. It should be noted in this respect that, since the TAA entered into force, four new shipping lines, all non-Community, have joined it.

(262) The shipping lines which benefit most from the situation created by the TAA are the few independents, which have increased their market shares while at the same time increasing their rates. The main shipping lines of that kind are Evergreen (Taiwan) and, to a lesser extent, Lykes (United States) Atlantic Cargo (Sweden) and ICL (United States) (See point 448).

(263) The effect of the TAA on Community shipping lines is fairly complex: it has helped to restrict or eliminate their losses in this market; on the other hand, it has benefited the non-Community shipping lines which are party to the agreement in the same way, and it has brought even bigger benefits to the non-Community lines operating in the Atlantic which are not party to it (see recital 262). The Community lines have lost market share since the agreement came into force. Lastly, the aim of the TAA is not to restructure the trade in such a way as to ensure the long term competitiveness of the European fleet. The increase in rates and the capacity freeze have produced a temporary improvement in the profitability of European lines in the Atlantic, without enabling them better to control costs or securing any lasting improvement in their competitive position, particularly in the case of those which might be suffering from some lack of competitiveness. It is difficult to view the TAA, as it currently operates, as an effective and durable means of protecting or defending the European fleet.

IV. THE COMPLAINTS

(264) The Commission has received complaints from the following parties:

- Port of [. . .] Authority (13 October 1992),

- [. . .], Union Professionelle [. . .] pour l'Importation de denrées alimentaires (13 October 1992),

- the Committee of North Sea Port Forwarding Agents (19 October 1992), supported by the Fédération Française des Organisateurs Commissionnaires de Transport (FFOCT) (19 March 1993),

- the European Shippers' Councils (ESC) (4 November 1992), supported by a letter from the German Shippers' Council (DSVK) on 26 November 1992,

- [. . .] (30 November 1992),

- the French Shippers' Council (CNUT) (18 December 1992),

- the British Shippers' Council (BSC) (21 December 1992), supported by letters from the Irish Exporters' Association on 1 and 9 February 1993,

- the Spanish Shippers' Council (16 March 1993),

- the forwarding agent [. . .] (19 April 1993),

- BIFA, British International Freight Association (28 April 1993),

- Clecat, Comité de Liaison Européen des Commissionaires et Auxiliaires de Transport (25 May 1993),

- The National Industrial Transportation League (19 July 1993).

(265) The Port of [. . .] Authority has complained about the introduction of range additionals (see point 200) in relation to the Danish ports of [. . .].

(266) The Committee of North Sea Port Forwarding Agents, Clecat and the FFOCT complain that the agreed rates include port charges and inland freight although no exemption pursuant to Article 85 (3) of the Treaty applies to such matters.

(267) [. . .], a medium-sized forwarding company, complains that the TAA applies discriminatory conditions to it compared with the conditions granted to the largest forwarding agents (rates 30 to 40 % more expensive).

(268) The British International Freight Association complains of discriminatory conditions applied by the TAA against United Kingdom forwarding agents and considers such practices to be an abuse of a dominant position.

(269) The ESC argues that the TAA is not a conference and does not meet the requirements of Article 85 (3) of the Treaty. It asked the Commission on 6 January 1993 to take interim measures against the TAA. The DSVK complains about rate fixing with respect to inland transport and about the capacity management programme, which artifically reduces capacity without reducing costs.

(270) [. . .] complains of a refusal to negotiate on the part of the TAA, the imposition of tariffs which cannot be economically justified, the sudden large increases in tariffs which have jeopardized the exports of [. . .] to the United States, and a deliberate suspension of capacity amounting to a refusal to deal.

(271) On 16 March 1993 the Spanish Shippers' Council wrote to the Commission asking that the exemption requested by the members of the TAA should not be granted. It pointed out that such an exemption would grant a monopoly to those lines and would be an obstacle to obtaining sea and inland transport services under normal market conditions.

(272) The National Industrial Transportation League (NITL) is an association of shippers operating in the United States, comprises more than 1 200 members and represents shippers directly affected by the TAA in the eastbound and westbound sectors.

(273) The NITL considers that the TAA is an anti-competitive and particularly discriminatory agreement which has caused and is continuing to cause substantial harm to shippers. The agreement has in particular imposed unreasonable and unjustifiable rate increases, has without reason restricted the scope for concluding contracts between shippers and shipowners that would allow sound commercial relations, and has led to unreasonable discrimination against small shippers.

(274) The CNUT (the French Shippers' Council) complains on the following grounds:

1. abuse of a dominant position, demonstrated by the sudden large increases in tariffs (for certain goods up to 175 %) and by the imposition of unfair trading conditions, in breach of Articles 85 and 86 of the Treaty;

2. artificial limitation of the supply of transport, in breach of Articles 85 und 86 of the Treaty;

3. artificial sharing of the market between the members of the agreement, in breach of Article 86 of the Treaty;

4. discrimination between shippers, in breach of Articles 85 and 86 of the Treaty;

5. fixing of common tariffs for inland haulage, in breach of Articles 85 and 86 of the EC Treaty and Regulations (EEC) No 1017/68 and (EEC) No 4056/86;

6. an agreement with the members of the conference operating between Canada and Europe.

(275) The CNUT requests the adoption of interim measures pursuant to Articles 10 and 11 of Regulation (EEC) No 4056/86.

(276) The BSC complains that the TAA infringes Articles 85 and 86 of the EEC Treaty, inasmuch as the TAA:

1. limits, controls or shares the supply of sea and inland transport, technical development and investment to the detriment of shippers;

2. directly or indirectly fixes, and unfairly imposes, transport and other rates and conditions or any other tradi