| |Brussels, 29.07.2005

SG-Greffe(2005) D/204121

In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC) No 139/2004 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description. |

For the notifying party

Dear Sirs,

Subject : Case No COMP/M.3829 – Maersk/PONL Notification of 9 July 2005 pursuant to Article 4 of Council Regulation No 139/2004[1]

1. On 9 June 2005, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 by which A.P. Møller – Mærsk A/S (”Maersk”, Denmark) acquires within the meaning of Article 3(1)(b) of the Council Regulation control of the whole of Royal P&O Nedlloyd N.V. (“PONL”, Netherlands) by way of public bid.

I. THE PARTIES

2. Maersk is an international group with activities in container shipping, container terminal services, harbour towage, operation of tankers, logistics, oil and gas exploration, air transport, shipbuilding and supermarkets.

3. PONL is mainly a container liner shipping company, which is also involved in container terminal services, logistics and air transport.

II. THE OPERATION

4. Maersk made a public offer for all shares of PONL. The proposed offer was recommended by PONL’s Board of Directors. The offer memorandum setting out the terms of the offer was published in mid June. Under the tender offer, beginning of August has been indicated for the closing of the acceptance period.

III. CONCENTRATION

5. After completion of the transaction, Maersk will acquire sole control of PONL.

IV. COMMUNITY DIMENSION

6. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 billion[2]. Each of Maersk and PONL have a Community-wide turnover in excess of EUR 250 million, but they do not achieve more than two-thirds of their aggregate Community-wide turnover within one and the same Member State. The notified operation therefore has a Community dimension.

V. COMPETITIVE ASSESSMENT

A. RELEVANT PRODUCT AND GEOGRAPHIC MARKETS

Containerised liner shipping

7. Containerised liner shipping involves the provision of regular, scheduled services for the carriage of cargo by container. As to the frequency, it can be distinguished from non-liner shipping (charter, tramp, specialised transport), as to the mode of transport it differs from non-containerised transport (bulk, vessel). Previous merger decisions have defined the market for containerised liner shipping services on one or more trades[3]. A possible narrower product market is that for transport of refrigerated goods, which could be limited to reefer (refrigerated) containers only or could include transport in conventional reefer (refrigerated) vessels.

8. From a demand side perspective, certain goods such as fruit, meat and dairy products must be shipped under refrigerated conditions. For this reason, non-reefer containers are not a substitute for reefer containers.

9. As to the supply side, in principle each container ship can carry non-reefer containers as well as reefer containers. Reefer containers have their own cooling unit which depends on electric energy to be provided by the ship. Container ships therefore need reefer plugs and sufficient power generation capacity to be able to transport refrigerated goods in reefer containers. According to a third party report, much of the world’s container shipping fleet is equipped with plugs for reefer containers, but they are not necessarily in use for this purpose[4]. The report indicates that it would be relatively inexpensive to equip a vessel for reefer containers and the slot could be used for non-reefer containers as well[5]. The parties estimate that approximately [10-20]% of the total containerised shipping capacity represents potential reefer carrying capacity.

10. On trades with a share of reefer containers in relation to all containerised cargo below 10% in both directions, the ships have in general more reefer facilities than actually used. Carriers will therefore be able to shift volume from transport of non-reefer containers to transport of reefer containers in the short term and without significant additional costs. On these trades, transport in reefer containers is not assessed separately, but as part of the overall market for container liner shipping services.

11. On imbalanced trades with high shares of transport in reefer containers in relation to all containerised cargo in one direction and relatively low shares in the other direction, the situation on the supply side can be different. On the trade directions with a high reefer share, the reefer capacity on the ships can be exhausted. Installation of additional plugs and power generation capacities on ships which are already operating on the trade entails time delays and additional investments. An increase of reefer capacity can require substantial technical adjustments on a ship designed for and equipped with 10% reefer plugs, in particular if additional cooling mechanisms become necessary. The redeployment of ships with higher reefer capacity also comes with time delays and additional costs. On these trades, supply side substitution is therefore more difficult.

12. As to the possible substitution between transport in reefer containers and transport in bulk reefer vessels, the recent PO/Royal Nedlloyd decision observed that on certain trades containerised liner shipping services compete with conventional reefer vessel services for the carriage of refrigerated cargo. This said the market definition was ultimately left open[6]. The parties argue that transport by conventional reefer vessels should be included into the market.

13. However, the market investigation produced some evidence that substitution is mainly one-way from bulk reefer to reefer containers, whereas substitution from reefer containers to transport in bulk reefer vessels seems to be relatively limited[7]. The possibility of substitution depends on a number of factors, such as the product shipped, the volume shipped, the logistic chain, cooling techniques available and sanitary requirements. These factors may differ from trade to trade. Possible competitive constraints on transport in reefer containers stemming from transport in reefer vessels are therefore examined in the framework of the assessment of each trade.

14. The geographical dimension of containerised liner shipping services consists of single trades, defined by the range of ports which are served at both ends of the service. Each trade has specific characteristics depending on the volumes shipped, the types of cargo transported, the ports served and the length of the journey from the point of origin to the point of destination. Considering that in liner shipping supply has to be provided by a sufficient number of vessels to generate a scheduled service, these characteristics influence the level of barriers to entry that may be present on the trade. Relevant trades are those from Northern Europe to other non European areas[8] and back and from the Mediterranean to other non European areas and back[9].

15. The parties put forward that the two directions of a trade should not be distinguished and that for certain trades Northern European and Mediterranean ports should be part of the same market. However, the market conditions on the two directions of a trade can be different, in particular in case of trade imbalances or different characteristics of the products shipped[10]. In these instances, a distinction between the two directions of a trade is justified.

16. As regards substitution between Northern European and Mediterranean ports, the possibility of inland transport and transhipment between Northern Europe and the Mediterranean does not seem to lead to substitution to a considerable extent. On this point it is however not necessary to conclude on a precise definition of the geographic dimension of each trade because the competition analysis will not significantly differ under both alternative market definitions.

Container terminal services

17. Previous merger decisions have defined the market for stevedoring services for deep-sea container ships, broken down by traffic flows to hinterland traffic (= direct deep-sea) and transhipment traffic (= relay/feeder)[11].

18. The geographic dimension of stevedoring services for hinterland traffic in Northern Europe[12] extends to UK/Ireland on the one hand, and the Northern Continental ports on the other hand[13]. However, previous merger decisions left open whether the catchment area of the Northern Continental ports might be further broken down. The widest realistic range would be Hamburg – Le Havre, a narrower range might be Hamburg – Antwerp. The exact geographic scope can be left open, because even on the basis of the narrower market definition, the transaction will not significantly impede effective competition.

19. The geographical dimension of stevedoring services for transhipment traffic extends to Northern Europe, i.e. all deep-sea ports in the Le Havre – Gothenburg range including the ports in the UK and Ireland[14] on the one hand and the Mediterranean on the other hand.

In-land transportation of containerised goods

20. The Commission has in the past indicated that various means of transport probably constitute separate product markets and that geographically the market may be national or even wider[15]. It is not necessary to conclude on a precise definition of the relevant market in this case as the transaction does not lead to competition concerns under any alternative market definition.

Logistics services

21. The Commission has defined contract logistics services as a separate product market consisting of services that comprise planning, implementation and control of the flow and storage of goods[16]. Geographically the Commission previously defined the market as generally national in scope[17]. In this case, however, it is not necessary to define the market precisely, because under any possible market definition no competition concerns will arise.

Air transport

22. For the passenger air transport, the Commission has in the past defined the relevant market for scheduled passenger air transport services on the basis of the “point of origin / point of destination” (O&D) city pair approach[18]. The Commission further subdivided this market into two distinct markets for time-sensitive and non time-sensitive passengers. Furthermore, it considered that for long-haul flights competitive indirect flights may be included in the O&D pair markets and that for short-haul flights in some instances other means of transport (such as high speed train service) may be included in the market depending on travelling time, frequency of the train service and price.[19] It is not necessary to decide on a precise definition of the relevant market in this case as the concentration does not lead to competition concerns under any alternative market definition.

23. Air cargo transport markets have been defined by the Commission as wider than air passenger transport as cargo may be routed with a higher number of stop-overs and indirect routes are substitutable to any direct route. Thus for intra-European cargo, the market was defined as European-wide, including road and, to a limited extent, also other modes of transport[20]. For intercontinental routes, the Commission has found that the corresponding catchment areas broadly correspond to continents, at least for those continents where local infrastructure is adequate to allow for onward connections, for example in case of North Atlantic routes[21]. However, it is not necessary to delineate the market further, because under any possible market definition no competition concerns will arise.

Harbour towage

24. Harbour towage services are provided to large vessels (container ships, bulk vessels, cruise ships etc.) and include precise manoeuvring, positioning assistance, safe berthing, un-berthing and passing narrow gateways. The Commission has so far not defined the relevant market in the area of harbour towage. The parties submit that there is a separate market for harbour towage services and that its geographical dimension may be limited to a single port, even though there is likely to be competitive pressure from companies active in neighbouring ports as at least container carriers generally consider ports in a geographic range to be substitutes for one another. The exact definition of the geographic market can however be left open because even on the basis of the narrowest market definition, the operation will not lead to competition concerns.

B. ASSESSMENT

Containerised liner shipping

25. Maersk is the number one global carrier with a worldwide share of capacity of about [10-20]%. PONL is currently the number four global carrier with about [0-10]% capacity share. Number two and three are the Mediterranean Shipping Company (MSC, Switzerland, about [0-10]%) and Evergreen (Taiwan, about [0-10]%). Number five to ten have a share between [0-10]% and [0-10]%[22].

26. On all main EU trades, the combined market shares of the parties are above 15%. Affected markets are therefore the trades from North Europe and from the Mediterranean to:

27. North America

28. Far East

29. Middle East

30. Indian Subcontinent

31. East Africa

32. South Africa

33. West Africa

34. Caribbean and Central America

35. East Coast South America

36. West Coast South America

37. Australia/New Zealand

38. Maersk and PONL are members of a number of liner conferences, consortia and alliances[23]. Conferences, consortia and alliances are arrangements between shipping lines that play an important role in the organisation of the liner shipping industry. They restrict competition between their members.

39. Liner shipping conferences are groups of vessel-operating carriers which engage in price fixing and capacity regulation. These activities are exempted from the prohibition contained in Article 81 by Council Regulation 4056/86. Conferences are required to set common or uniform freight rates and may make a common policy on the discounts or rebates which may be offered to shippers in the geographical area covered by the conference. In addition, conferences fix surcharges[24] and ancillary charges[25] per trade, country, port or direction as relevant. Furthermore, conferences discuss capacity utilisation, volume lifted by each member line, evaluate members’ market shares and carry out market forecasting through the elaboration of a business plan.

40. There is at present some internal competition within conferences because individual rate fixing between carriers and shippers is allowed. In these cases the conference tariff is not applied but used as a benchmark to fix the price of individual or multi-carrier contracts. The percentage of the parties’ cargo that is carried under individual service contracts is an indication of the extent to which internal competition takes place. However it cannot be assumed that the other members of the conference also carry roughly the same percentage of cargo in individual service contracts. Surcharges and ancillary charges are still imposed by all conference members on cargo that transits under individual service contracts. This results in part of the price being fixed jointly. The percentage of surcharges in relation to the price of the sea leg of the journey varies from trade to trade with an average of about [20-30]%. There is no competition between the members of a conference on this important part of the price.

41. Consortia and alliances are operational agreements between carriers on a trade-by-trade or global basis for the provision of a joint service. Unlike conferences, consortia do not price fix but carry out extensive co-operation. This co-operation ranges from vessel sharing, exchange of space or slots in vessels, equipment interchange, joint operation or use of port terminals and related services, temporary capacity adjustments to the participation in a revenue or a cargo pool, joint marketing and the issuing of a joint bill of lading. It is exempted from the prohibition contained in Article 81 of the Treaty by Commission Regulation 823/2000 as amended by Regulation 611/2005. The block exemption is predicated on the assumption that in order to fulfil Article 81(3), consortia are subject to internal or external competition[26]. The extent to which competition amongst member lines takes place depends on the characteristics of the consortium. Exchange of commercially sensitive information takes place within consortia at least to the extent necessary for the provision of the joint service. This may include for example information on individual members’ lifting, actual and future, terms and conditions negotiated with third parties for the provision of port terminal services or customer information. The bundling of several consortia each operating in a different trade is known as an alliance.

42. The combined market position of the members of conferences and consortia can be substantial. Carriers are often members of a conference and of one or more consortia on the same trade. This enables them to cumulate the benefits of the Conference Block Exemption Regulation (price fixing) and of the Consortia Block Exemption Regulation (operational arrangements for the provision of a joint service). In line with previous merger decisions, the parties’ membership in conferences and consortia is taken into account in the assessment of the consequences of the operation on the affected markets[27]. Therefore, market shares of the merged entity and those of relevant conferences and consortia are considered. The market share of a conference or a consortium is the aggregated market share of their members, calculated on the basis of the members’ volume which is carried under the conference or consortium agreement.

43. Depending on the parties’ membership, the proposed transaction will have different effects on conferences and consortia. The following alternatives may occur:

44. In cases where the parties are currently in the same conference or consortium and Maersk maintains its membership, the concentration would not change the total market share of the conference or consortium. Depending on the structure of the conference or consortium, however, this could lead to a strengthening of the internal cohesion and eventually lead to Maersk controlling the conference.

45. In some instances Maersk is in a conference or consortium, but not PONL, even though it is active on the same trade. If Maersk maintains its membership, PONL can be expected to be integrated into the conference or consortium. The market share of the conference or consortium will rise. If only PONL is in a conference or consortium, the merger would create a link between Maersk and the conference and/or the consortium. This link would enable Maersk to take part in the exchange of information within the conference and/or the consortium. Maersk could use the commercially sensitive information exchanged therein to adapt over time its conduct on the market, thus increasing the risk of market sharing or lessening of competition between itself and the other members of the conference or the consortium. Even without integrating itself into the conference or the consortium, Maersk would no longer be an independent competitor because it controls a member of the conference or the consortium.

46. The effects of the proposed transaction will be assessed for each affected market. The assessment is generally based on the information provided by the parties. In some cases the market investigation has shown a discrepancy between the market shares indicated by the parties and the figures provided by third parties. Where relevant, this is signalled.

Affected Markets

North Europe – North America

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[0-10]%

([10-20]% (West Bound)

[0-10]% (East Bound)) |[0-10]%

([0-10]% (West Bound)

[0-10]% (East Bound))

|[10-20]%

([10-20]% (West Bound)

[10-20]% (East Bound )) |TACA (Maersk and PONL) |[40-50]% |Canex (Maersk and PONL)

Grand Alliance/CP Ships (PONL) |[0-10]%

[30-40]% |CP Ships b

Hapag Lloyd a, b

MSC a

OOCL a,b

Evergreen

ICL |[10-20]%

[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of TACA

b = Member of Grand Alliance/CP Ships

47. The aggregated market share of Maersk and PONL on the North Europe – North America trade is [10-20]% westbound (to North America) and [10-20]% eastbound (to North Europe). The most important competitors and their approximate market shares are: CP Ships ([10-20]%), Hapag Lloyd ([10-20]%), MSC ([0-10]%) and OOCL ([0-10]%). Shipping lines which are not linked to Maersk or PONL by conferences or consortia are Evergreen and ICL (both about [0-10]%).

48. Both Maersk and PONL are in the TACA conference, which has a market share of close to [40-50]%. Other members of TACA are Hapag-Lloyd, OOCL, MSC, NYK and ACL.

49. Both parties are also members of the Canex consortium, which has a market share below [0-10]%. Only PONL is member of the Grand Alliance/CP Ships consortium (Grand Alliance). The Grand Alliance has a market share of [30-40]%. Other members of the Grand Alliance are Hapag Lloyd, OOCL, NYK and CP Ships. There are two other consortia active on this trade of which neither of the parties are member: CKYH ([0-10]% market share) and New World Alliance (NWA, [0-10]%). Maersk has a slot charter agreement with NWA representing nearly [0-10]% of the total volumes shipped on the trade, according to which Maersk uses [60-80]% and NWA [20-40]% of the slots.

Non-coordinated effects

50. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns on this trade. There is a sufficient number of competitors with an appreciable presence on these trades which can constrain the behaviour of the parties. In both trade directions, the transport of refrigerated goods accounts for less than [0-10]% of the overall market and is thus not discussed separately.

Coordinated effects

51. The transaction changes the structure within TACA, creates a link between Maersk and the Grand Alliance and strengthens the link between TACA and the Grand Alliance.

52. Both Maersk and PONL are currently members of TACA. Competition between the members of TACA is restricted[28]. The transaction reduces the number of members from 7 to 6 and Maersk will represent about [20-30]% of the volume of the conference. TACA has [description of voting system]. Consequently, Maersk will not be able to control TACA post-merger. Given the structure of TACA, it cannot be expected that the reduction of members from 7 to 6 will appreciably strengthen the cohesion within the conference.

53. The transaction would create a link between Maersk and the Grand Alliance. Competition between the members of the Grand Alliance is restricted[29]. Even without integrating itself into the consortium, Maersk will no longer be an independent competitor of the Grand Alliance because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium. The combined market share of Maersk and the Grand Alliance would be [40-50]%.

54. In addition, the link between Maersk and Grand Alliance could influence the structure within TACA. All members of the Grand Alliance except CP Ships are also members of TACA. At present 4 out of 7 members which represent less than [50-60]% of the total volume of TACA are linked to the Grand Alliance. Post-merger 4 out of 6 members of TACA representing about [70-80]% of the total volume shipped by all TACA members would be interlinked due to their co-operation in the Grand Alliance. Therefore the transaction could strengthen the cohesion within TACA.

55. TACA is the only conference on this trade and the Grand Alliance is the strongest consortium. The competitors active on this trade, such as the consortia CKYH and NWA and the independent carriers Evergreen and ICL, each carry at least four times less volume than the combined volume of Maersk and the Grand Alliance. Furthermore, Maersk is linked to NWA by a slot charter agreement. This link limits competition between Maersk and NWA because the agreement foresees a close co-operation within its scope[30].

56. On the basis of the above, on the North Europe – North America trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk and the Grand Alliance.

Mediterranean – North America

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[10-20]%

([10-20]% (West Bound)

[10-20]% (East Bound)) |[10-20]%

([0-10]% (West Bound)

[10-20]% (East Bound))

|[20-30]%

([20-30]% (West Bound)

[30-40]% (East Bound)) |USSEC (Maersk and PONL) |[30-40]% |FAMEX

GAMEX

NAMEX

(all PONL) |[0-10]%

[0-10]%

[0-10]% |Zim b

MSC

COSCO

Hapag Lloyd a, b

CP Ships |[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of USSEC conference

b = Member of FAMEX, GAMEX or NAMEX consortia

57. The aggregated market share of Maersk and PONL on the Mediterranean – North America trade is [20-30]% westbound (to North America) and [30-40]% eastbound (to the Mediterranean). The most important competitors and their approximate market shares are: Zim ([10-20]%), MSC ([0-10]%), COSCO ([0-10]%), Hapag Lloyd ([0-10]%) and CP Ships ([0-10]%). Shipping lines which are not linked to Maersk or PONL by conferences or consortia are MSC, COSCO and CP Ships.

58. Both Maersk and PONL are in United States South Europe Conference (USSEC)[31] which has a market share of [30-40]%.

59. PONL is member of the consortia FAMEX (with Hapag Lloyd), GAMEX (with Hapag Lloyd and Zim) and NAMEX (Hapag Lloyd, CMA CGM, Lloyd Triestino). The combined market share of all three consortia is about [10-20]%. The CKYH consortium[32] is active on this trade with about [0-10]% market share, of which neither of the parties are member.

Non-coordinated effects

60. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns on this trade. There are a sufficient number of competitors with an appreciable presence on these trades which can constrain the behaviour of the parties. In both trade directions, the transport of refrigerated goods accounts for less than [0-10]% of the overall market and is thus not discussed separately.

Coordinated effects

61. Both Maersk and PONL are currently members of USSEC. Competition between the members of USECC is restricted[33]. The transaction reduces the number of members from 3 to 2. USSEC has [description of the voting system and possibility to influence decision making process]. The transaction might strengthen the cohesion within USSEC. However, the market share of the conference of [30-40]% does not give rise to competition concerns, in particular in view of three independent competitors which reach together the same market share as the conference.

62. The transaction would create links between Maersk and FAMEX, GAMEX and NAMEX. However, the combined market share of Maersk and these consortia of below [20-30]% does not lead to competition concerns.

63. Consequently, on the Mediterranean – North America trade, the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Northern Europe - Far East

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences in which parties are members |Consortia in which parties are members |Individual Carriers | |[10-20]%

([10-20]% (East Bound)

[10-20]% (West Bound)) |[0-10]%

([0-10]% (East Bound 1)

[0-10]% (West Bound))

|[10-20]%

([10-20]% (East Bound)

[10-20]% (West Bound)) |FEFC

(Maersk and PONL) |[50-60]% |Grand Alliancea

(PONL)

|[20-30]%

|Hanjin/Senator d

COSCO d

Evergreen

MSC

CMA CGM a

CSCL

APL a, c

Hapag Lloyd a, b

NYK a, b |[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of FEFC

b = Member of the Grand Alliance

c = Member of the New World Alliance

d = Member of the CKYH consortium

64. The parties combined market share is [10-20]% westbound from North Europe to the Far East and [10-20]% eastbound from the Far East to North Europe. The most important competitors and their approximate market shares are: Hanjin/Senator ([0-10]%), COSCO ([0-10]%), Evergreen, MSC, CMA CGM, CSCL (each [0-10]%), Hapag Lloyd and NYK (each [0-10]%). Only Evergreen and MSC operate outside conferences or consortia to which the parties are members.

65. Both parties are members of the Far East Freight Conference (FEFC), which has 14 members[34]. The market share of the FEFC is [50-60]%.

66. PONL operates in the trade within the Grand Alliance consortium. It is the most important member of the Alliance with a market share of [0-10]%. The other members of the Grand Alliance are Hapag-Lloyd, NYK, OOCL and MISC. All members of the Grand Alliance are also members of the FEFC. The market share of the consortium is [20-30]%.

67. There are two rather strong competing consortia operating on this trade, CKYH[35] with a market share of [20-30]% and NWA[36] accounting for [10-20]%. Two out of the four members of CKYH and all three members of the NWA are also members of FEFC conference.

Non-coordinated effects

68. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns. There are a sufficient number of competitors with an appreciable presence on the trade able to constraint the behaviour of the merging parties. The transport of refrigerated goods accounts for less than [0-10]% in both directions and is thus not discussed separately.

Coordinated effects

69. The transaction changes the structure within FEFC, creates a link between Maersk and the Grand Alliance and strengthens the link between FEFC and the Grand Alliance.

70. Both Maersk and PONL are members of FEFC. Competition between the members of FEFC is restricted[37]. The transaction results in a decrease in the number of FFEC’s members from 14 to 13. Maersk will represent about [30-40]% of the volume of the conference. FEFC has [description of the voting system]. Consequently, Maersk will not be able to control the FEFC post-merger. Given the structure of FEFC, it cannot be expected that the reduction of members from 14 to 13 will appreciably strengthen the cohesion within the conference.

71. The transaction would create a link between Maersk and the Grand Alliance. Competition between the members of the Grand Alliance is restricted[38]. Even without integrating itself into the consortium, Maersk will no longer be an independent competitor of the Grand Alliance because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium. The combined market share of Maersk and the Grand Alliance would amount to [30-40]%.

72. The link between Maersk and Grand Alliance could influence the structure within FEFC. At present 4 out of 14 members which represent less than [30-40]% of the total volume of FEFC are linked to the Grand Alliance. Post-merger 4 out of 13 members of FEFC representing about [50-60]% of the total volume shipped by all FEFC members would be interlinked due to their co-operation in the Grand Alliance. However, given the high number of members of FEFC which operate outside the Grand Alliance as independent operators or in another consortium, it cannot be expected that this will appreciably strengthen the cohesion within FEFC.

73. Regarding competitive constraints outside the Grand Alliance, the two other consortia operating on this trade have substantial market shares. In particular the CKYH consortium’s market share is not substantially lower than the combined market share of Maersk and the Grand Alliance. On this trade, Maersk is not linked to NWA by a slot charter agreement.

74. Consequently, on the Northern Europe - Far East trade the transaction does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Mediterranean - Far East

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences in which parties are members |Consortia in which parties are members |Individual Carriers | |[10-20]%

([10-20]% (East Bound)

[10-20]% (West Bound)) |[0-10]%

([0-10]% (East Bound l)

[0-10]% (West Bound))

|[20-30]%

([20-30]% (East Bound)

[20-30]% (West Bound)) |FEFC

(Maersk and PONL) |[40-50]% |Grand Alliance

(PONL) |[10-20]%

|MSC

CMA CGM a , d

Yang Ming a , b , c

Evergreen

CSCL

COSCO a, c

|[10-20]%

[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

| |a = Member of FEFC

b = Member of the Grand Alliance

c = Member of the CKYH consortium

d = Member of the BEX consortium

75. The parties have a combined market share of [20-30]% westbound from the Far East to the Mediterranean and [20-30]% eastbound from the Mediterranean to the Far East. The most important competitors and their approximate market shares are: MSC ([10-20]%), CMA CGM ([10-20]%), Yang Ming ([0-10]%) and Evergreen ([0-10]%). Only MSC and Evergreen operate outside conferences or consortia to which the parties are members.

76. The parties are both members of the FEFC conference, the membership of which is the same as on the North Europe – Far East trade. The combined market share of the conference is [40-50]%.

77. Maersk operates outside a consortium. PONL operates within two consortia, the Grand Alliance and the BEX consortium. The other members of the Grand Alliance are the same as on the North Europe – Far East trade. The market share of the Grand Alliance is [10-20]%. The market share for the BEX consortium where PONL operates together with CMA-CGM is minimal.

78. The CKYH consortium is operating on this trade with a market share of nearly [10-20]%. Two out of four members of CKYH are also members of the FEFC conference together with Maersk and PONL.

Non-coordinated effects

79. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns. There are a sufficient number of competitors with an appreciable presence on the trade able to constraint the behaviour of the merging parties. The transport of refrigerated goods accounts for less than [0-10]% of the overall market and is thus not considered separately.

Coordinated effects

80. At conference level, Maersk will not be able to control the FEFC post-merger. Neither the reduction of members from 14 to 13 nor increased links between FEFC and Grand Alliance can be expected to appreciably strengthen the cohesion within the conference[39].

81. The combined market share of Maersk and the Grand Alliance would amount to [20-30]%. The CKYH consortium operating on this trade and MSC have substantial market shares which are not substantially lower than the combined market share of Maersk and the Grand Alliance.

82. Consequently, on the Mediterranean to Far East trade the transaction does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Northern Europe / Mediterranean - Middle East

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences in which parties are members |Consortia in which parties are members |Individual Carriers | |[20-30]%

([20-30]% (East Bound)

[20-30]% (West Bound) |[0-10]%

([0-10]% East Bound)

[0-10]% (West Bound)

|[30-40]%

([30-40]% (East Bound)

[30-40]% (West Bound) |EMERA (Maersk & PONL)

NE/DC

(PONL) |[70-80]%

[10-20]% |Grand Alliance

(PONL)

EPIC III

(PONL) |[10-20]%

[0-10]% |UASC a, b

MSC c

CMA CGM a, b, d

CP Ships a, b, d

CSAV

Hanjin/ Senator

Hapag Lloyd a, b, e |[10-20]%

[10-20]%

[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

| |a = Member of the Europe to Middle East Rate Agreement

b = Member of India Pakistan Bangladesh Calcutta Conference

c = Member of North Europe to Djibouti conference

d = Member of EPIC III consortium

e = Member of the Grand Alliance

83. The parties have a combined market share of [30-40]% on the Northern Europe/Mediterranean - Middle East trade[40]. This figure is maintained on both trade directions. The main competitors are UASC with [10-20]% market share, MSC with [10-20]% and CMA-CGM with a market share of [10-20]%. All these competitors are members of conferences together with the parties.

84. Both parties are members of the conference Europe to Middle East Rate Agreement (EMERA)[41]. The market share of EMERA is approximately [70-80]%. PONL is also a member of the North Europe to Djibouti Conference (NE/DC)[42]. The market share of that conference is approximately [10-20]%.

85. On this trade, Maersk operates outside consortia. PONL operates in the Grand Alliance[43] and in the EPIC III Consortium[44]. The Grand Alliance has a market share of [10-20]% in the Europe to Middle East trade and the EPIC III consortium has a market share of approximately [0-10]%.

Non-coordinated effects

86. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns on this trade. There are a sufficient number of competitors with an appreciable presence in the market that can constrain the behaviour of the parties. In both trade directions, the transport of refrigerated goods accounts for less than [0-10]% of the overall market and is thus not discussed separately.

Coordinated effects

87. The transaction changes the structure within EMERA, creates links between Maersk on the one hand and the Grand Alliance, the EPIC III consortium and the NE/DC conference on the other hand and strengthens the links between EMERA and the NE/DC conference and between EMERA and the consortia to which PONL belongs.

88. Both parties are members of the EMERA. Competition between the members of EMERA is restricted[45]. The transaction reduces the numbers of EMERA from 9 to 8. EMERA’s [description of the voting system]. Consequently Maersk will not be able to control the conference post-merger. Given the structure of EMERA, it cannot be expected that the reduction of members from 9 to 8 will appreciably strengthen the cohesion within the conference.

89. In addition, the transaction will create a link between Maersk and the NE/DC conference to which currently only PONL is a member. Competition between the members of the NE/DC Conference is restricted[46]. The NE/DC conference agreement [description of the voting system] given the small number of members it can be presumed that internal cohesion is strong. Maersk will be able to influence decisions within the conference via PONL’s membership and to benefit from the price fixing and information exchange taking place within the conference. Maersk would no longer be an independent competitor of the members of the NE/DC Conference.

90. The combined market share of Maersk and the NE/DC conference is [40-50]%. This is an important increase in the market shares of the NE/DC Conference from [10-20]% pre-merger. As currently the two other members of NE/DC conference besides the parties and MSC are very small carriers[47] to whom the parties have not attributed market share, the transaction could strengthen the cohesion between the parties and their second largest competitor MSC. In addition, the transaction strengthens the links between the conferences EMERA and NE/DC, bringing nearly all competitors on this trade into these two umbrella organisations.

91. Furthermore, the transaction will result in the creation of links between Maersk on the one hand and the EPIC III consortium and the Grand Alliance to both of which PONL belongs on the other hand. Competition between the members of the EPIC III consortium and between the members of the Grand Alliance is restricted[48]. Even without integrating itself into the consortia, Maersk will no longer be an independent competitor of EPIC III and Grand Alliance because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortia.

92. The combined market share of Maersk, EPIC III and the Grand Alliance would be [40-50]%. Considering that CMA CGM, member of EPIC III, operates an additional service outside the consortium, the combined market share of Maersk, the consortia and CMA CGM would reach [50-60]%. In addition as a result of the new links between Maersk, EPIC III, Grand Alliance and NE/DC conference there are virtually no competitors able to carry out a competitive restraint that will not be linked to the parties through a common membership of either a conference or a consortium.

93. In addition, the link between Maersk and the consortia could influence the structure within EMERA. At present 6 out of 9 members which represent less than [40-50]% of the total volume of EMERA are linked to the consortia. Post-merger 6 out of 8 members of EMERA representing about [60-70]% of the total volume shipped by all EMERA members would be interlinked due to their co-operation in the consortia. Therefore the transaction could strengthen the cohesion within EMERA.

94. On the basis of the above, on the North Europe/Mediterranean to Middle East trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk on the one hand and the NE/DC conference, the EPIC III consortium, and the Grand Alliance on the other hand.

Northern Europe/Mediterranean - Indian Subcontinent

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences in which parties are members |Consortia in which parties are members |Individual Carriers | |[20-30]%

([20-30]% (South Bound)

[20-30]% (North Bound)) |[0-10]%

([0-10]% (South Bound)

[10-20]% (North Bound))

|[30-40]%

([30-40]% (South Bound)

[30-40]% (North Bound)) |IPBCC

(Maersk and PONL) |[70-80]% |EPIC III

(PONL)

Grand Alliance

(PONL) |[10-20]%

[0-10]% |MSC

CMA CGM a, c

UASC a

SC India a

MISC a, b

CSAV

Yang Ming a

Evergreen a

CP Ships a, c |[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of IPBCC

b = Member of the Grand Alliance

c = Member of the EPIC III consortium

95. The parties have a combined market share of [30-40]% on the trade from Northern Europe/Mediterranean to the Indian Subcontinent. This figure is maintained on both trade directions. The parties are appreciably stronger on the North Europe – Indian Subcontinent trade ([30-40]%) than on the Mediterranean – Indian Subcontinent trade ([20-30]%). The main competitors and their approximate market shares are: MSC ([10-20]%), CMA CGM ([0-10]%) and UASC ([0-10]%). Only MSC operates outside conferences or consortia to which the parties are members.

96. Both parties are members of the IPBCC conference. The conference has 15 members[49] and a market share of [70-80]%.

97. On this trade Maersk operates outside consortia. PONL for its part operates within the EPIC III consortium[50] and within the Grand Alliance. The EPIC III consortium has a [10-20]% market share. The Grand Alliance has a [0-10]% market share.

Non-coordinated effects

98. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns on this trade. There are a sufficient number of competitors which can constrain the behaviour of the parties. In both trade directions, the transport of refrigerated goods accounts for less than [0-10]% of the overall market. It is therefore not considered separately.

Coordinated effects

99. The transaction changes the structure within IPBCC, creates links between Maersk on the one hand and the consortia EPIC III and the Grand Alliance on the other hand and strengthens the links between IPBCC and the consortia to which PONL belongs.

100. Both parties are members of the IPBCC conference. Competition between the members of the IPBCC conference is restricted[51]. The transaction reduces the number of members of the IPBCC from 15 to 14. IPBCC [description of the voting system] and consequently Maersk will not be able to control the conference post-merger. Given the structure of IPBCC, it cannot be expected that the reduction of members from 15 to 14 will appreciably strengthen the cohesion within the conference.

101. The transaction would create links between Maersk on the one hand and the EPIC III consortium and the Grand Alliance on the other hand. Competition between the members of the EPIC III consortium and between the members of the Grand Alliance is restricted[52]. The consortium members jointly slot charter to Hamburg Süd and Hapag Lloyd.

102. The combined market share of the Maersk, the EPIC III consortium and the Grand Alliance would be [40-50]%. Even without integrating itself into the consortia, Maersk will no longer be an independent competitor of EPIC III and Grand Alliance because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium.

103. In addition, the link between Maersk and the consortia could influence the structure within IPBCC. At present 7 out of 15 members which represent less than [30-40]% of the total volume of IPBCC are linked to the consortia. Post-merger 7 out of 14 members of IPBCC representing slightly less than [60-70]% of the total volume shipped by all IPBCC members would be interlinked due to their co-operation in the consortia. However, still half of the members of IPBCC would not be linked to the consortia. As decisions are taken [Description of the voting system and the possibility to influence the decision making process][53]. Therefore it cannot be expected that the additional links between IPBCC and the consortia will appreciably strengthen the cohesion within IPBCC.

104. Regarding competitive constraints, there are a number of carriers operating outside the consortia which have substantial market shares. In addition, MSC is operating outside the conference.

105. On the basis of the above, on the North Europe/Mediterranean to Indian Subcontinent trade the transaction does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement.

North Europe / Mediterranean – East Africa

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[20-30]%

([20-30]% (South Bound)

[20-30]% (North Bound)) |[0-10]%

([0-10]% (South Bound l)

[0-10]% (North Bound))

|[20-30]%

([20-30]% (South Bound)

[30-40]% (North Bound)) |EEAC (PONL) |[40-50]% | |

|MSC a

Delmas

CMA CGM a

DAL

WEC a |[30-40]%

[10-20]%

[0-10]%

[0-10]%

[0-10]% | |a Member of Europe to East Africa Conference (EEAC)

106. The aggregated market share of Maersk and PONL is about [20-30]% on the trade between Europe and East Africa[54]. The most important competitors and their approximate market shares are according to the information provided by the parties: MSC ([30-40]%), Delmas ([10-20]%), CMA CGM ([0-10]%), and DAL ([0-10]%) and WEC ([0-10]%)[55]. Of these only Delmas and DAL operate outside the conference to which PONL is a member.

107. In the trade direction from East Africa to Europe, the transport of refrigerated goods accounts for slightly more than [0-10]% of the overall market. In the other trade direction transport of refrigerated cargo represents less than [0-10]% of the overall market. The parties’ combined market share for the transport of reefer containers is only slightly above their overall market share.

108. PONL is member of the Europe/East Africa Conference (EEAC)[56] which has a market share of about [40-50]%.

Non-coordinated effects

109. The aggregated market share of the parties on the market for containerised liner shipping does not give rise to competition concerns on this trade. There are a sufficient number of competitors with an appreciable presence on these trades which can constrain the behaviour of the parties.

Coordinated effects

110. The merger would create a link between Maersk and EEAC. Competition between the members of EEAC is restricted[57]. Maersk will be able to influence decisions within the conference via PONL’s membership and to benefit from the price fixing and information exchange taking place within the conference. Maersk would no longer be an independent competitor of the conference but could use the information to adapt its conduct on the market.

111. As shown in the table above, the combined market share of Maersk and EEAC would be about [60-80]%. Maersk would lose its position as the most important competitor of EEAC. Maersk would in particular be linked to MSC, which has a comparable market size. Furthermore MSC has a slot charter agreement with PONL under the terms of which [description of the agreement]. This co-operation accounts for [0-10]% market share and would establish an additional link between Maersk and MSC. The only independent competitors with a market share above [0-10]% would be Delmas and DAL.

112. On the basis of the above, on the East Africa trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk and EEAC.

Europe - South Africa

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences in which parties are members |Consortia in which parties are members |Individual Carriers | |[20-30]%

([20-30]% (South Bound)

[30-40]% (North Bound)) |[10-20]%

([10-20]% (South Bound)

[10-20]% (North Bound)) |[40-50]%

([30-40]%

(South Bound)

[40-50]% (North Bound)) |ESAC

(Maersk & PONL) |[50-60]% |SAECS

(Maersk & PONL) |[50-60]%

|MSC

DAL a b

MACS b |[30-40]%

[0-10]%

[0-10]% | |a = Member of SAECS consortium

b = Member of the ESAC conference

113. The parties combined market share is [30-40]% southbound and [40-50]% northbound. This figure can be further broken down into [40-50]% southbound from North Europe and [50-60]% northbound from South Africa to North Europe. For the Mediterranean to South Africa the parties have [20-30]% southbound and [20-30]% northbound.

114. The most important competitor is MSC with [30-40]% market share southbound and [30-40]% market share northbound. MSC is the only carrier which does not take part in a conference or in a consortium to which the parties belong. The second largest carrier on the trade is Deutsche Africa Linen (DAL) with [0-10]% market share. The third largest competitor is Maritime Carrier Shipping (MACS) with [0-10]% market share.

115. The transport of refrigerated goods accounts for [30-40]% of the trade from South Africa to Europe and [0-10]% from Europe to South Africa. Northbound, the transport of reefer containers accounts for [40-50]% of Maersk’s volume and for [20-30]% of PONL’s volume. The main commodity shipped northbound is fresh fruit accounting for [80-90]% of refrigerated goods shipped. The combined market share of the parties in the transport of reefer containers is about [20-30]% if transport in conventional bulk reefer ships is included in the same market and about [50-60]% if only reefer containers are considered.

116. Most important competitors for the transport in reefer containers are MSC ([10-20]% market share for reefer containers only), DAL ([10-20]%) and MASC ([0-10]%). Transport for refrigerated goods in bulk reefer vessels is provided by Lauritzen Cool ([20-30]% market share for reefer containers and bulk reefer), Seatrade ([10-20]%) and Capesize ([0-10]%).

117. Both parties are members of the Europe to Southern Africa Conference (ESAC)[58] and of the Southern Africa to Europe Consortium (SAECS)[59]. The membership of the conference and the consortium is almost the same[60]. The ESAC conference has a [50-60]% southbound and [60-70]% northbound market share. The SAECS consortium has a [40-50]% market share southbound and a [50-60]% market share northbound from South Africa to Europe[61].

Impact of the transaction on the competitive situation

118. The parties put forward that the transaction would not appreciably change the market structure because Maersk and PONL currently are both member of ESAC and SAECS. The parties do not offer an independent service outside SAECS.

119. It is correct that ESAC and SAECS restrict competition between their members, however there remains limited competition between Maersk and PONL which will disappear as a result of the transaction.

120. Competition within ESAC and SAECS is restricted because the conference tariff is still predominant and the parties have dedicated a large proportion of their volume to multi-carrier contracts with other members of the conference and the consortium – namely [50-100]% for APMM and [50-100]% for PONL. In addition, ESAC fixes rebates on volumes for shippers and ancillary charges and surcharges which are applied to between [40% and 90%] of Maersk’s volume on the trade. Between [10-20]% and [30-40]% of the total price of transport on these trades are surcharges and ancillary charges, so that there is no competition between the members of the conferences on this important part of the price. SAECS is an integrated consortium. Vessels were specifically acquired by the parties to operate on this trade and there is a […] lock in period and a […] notice period before the parties can withdraw from the consortium.

121. Nevertheless, there remains limited competition between the members of ESAC and SAECS, in particular between Maersk and PONL. [50-100]% of Maersk’s volume and [0-50]% of PONL’s volume is carried under individually negotiated agreements with shippers. For this volume, there can be price competition between Maersk and PONL. This is of particular importance in a market structure which is in general characterised by various links between the carriers. The transaction would put an end to this limited price competition between Maersk and PONL. Furthermore, the parties have informed the Commission that [information on the procedure to enter into multi-carrier contracts and the possible consequences thereof].

122. In addition, the transaction changes the structure within ESAC and SAECS, which will be discussed under coordinated effects.

Non-coordinated effects

123. The parties have a substantial aggregated market share in the market for containerised liner shipping on this trade. They are in particular strong in the transport of refrigerated goods in reefer containers. Shippers from South Africa have expressed concern about the transaction as regards the availability of transport in reefer containers from operators other than Maersk. The parties on the other hand are of the opinion that there is a high degree of demand-side substitution between transport in reefer container and in bulk reefer[62].

124. A general trend can be observed according to which export volumes in reefer containers have increased steadily since the South African fruit market was deregulated in 1997[63]. In the last five years these volumes have increased from [20-30]% in 1999 to [60-70]% in the first half of 2005. This trend illustrates that many shippers that have switched from bulk reefer to reefer container in the past do not switch back to bulk reefer any more[64].

125. The market investigation produced strong indications that for certain shippers bulk reefer vessels are not a substitute for reefer containers. The possibilities of substitution between reefer container and bulk reefer depend on the characteristics of the product and the volume shipped.

126. Whereas some fruits such as lemons, apples, nectarines, pears and prunes are to an appreciable extent shipped both in reefer containers and bulk reefer[65], other fruits such as mixed citrus and subtropical fruits (e.g. avocados, mangos, litchees) are nearly only transported in reefer containers[66]. The same applies to fresh vegetables, marine and meat products.

127. Shippers point to several reasons for the dependence on reefer containers. For certain fruits temperature control must be preserved during the transport to guarantee the quality required by the customer. This can only be achieved by transport in reefer containers, because the fruits can be loaded in the container near the orchards and remain in the container until delivery to the customer. Secondly, shippers put forward that exports of fresh produce into the European Union have to adhere to strict food standards and phytosanitary measures and regulations[67]. In order to avoid contamination clean and closed/secure environments are created within the refrigerated containers that cannot be achieved in a reefer vessel. Thirdly, some shippers indicate that the choice of transport in container vessels is to a large extent determined by the customer (e.g. supermarkets) that request that the product be delivered in sealed containers door to door.

128. As to the volume shipped, according to the submissions of South African shippers a certain minimum production volume is required to justify the use of a reefer vessel. Consolidation or freight forwarding is not generally practised. There are also practical difficulties for consolidation such as the risk of contamination and different product requirements such as temperature control or customer requirements.

129. It is possible for the parties to identify the shippers which cannot substitute bulk reefer for reefer containers due to the characteristics of their products or due to their size. Shippers indicate the products which they intend to ship and also determine specific temperature requirements. The size of a shipper is in general known or could otherwise be deducted from the volume shipped. It is therefore possible to price discriminate against this distinct set of shippers.

130. The parties are facing few competitive constraints for the transport of reefer containers. Although MSC is a significant operator in the trade, it deploys low reefer capacity from South Africa to Europe[68], accounting only for [10-20]% of the transport of refrigerated goods in containers. A similar sized competitor is DAL, but it has a joint marketing platform called SAFDAL with Safmarine, which is owned by Maersk. Under the terms of the SAFDAL agreement, [description of the agreement]. Hence, DAL cannot be considered a competitor as […].

131. With regard to potential new entry, it should be considered that the South Africa trade is long and thin and has a limited growth potential[69]. There is also no record of a successful new entry in the past 7 years[70]. In addition to low volume, the competitive structure of the trade with a highly integrated consortium and conference and their preponderant presence in the market has a deterrent effect and increases the barriers to entry.

132. On the basis of the above, on the Europe to Southern Africa trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from a particularly strong position of the parties for the transport of reefer containers.

Coordinated effects

133. As both Maersk and PONL are currently members of ESAC, the merger reduces the number of members from 7 to 6. Safmarine is member of ESAC as well, therefore companies controlled by Maersk will have [description of ESAC’s voting system and the possibility to influence the decision making process]. However, as Maersk will account for more than [50-75%] of the volume carried by the conference, it will dominate ESAC. The countervailing power of PONL will disappear. In any event, this change in the structure of ESAC could strengthen the cohesion within ESAC and thereby further restrict competition between its members.

134. Both Maersk and PONL are currently members of SAECS. The merger reduces the number of members from 4 to 3. As Safmarine is member of SAECS as well, Maersk controls 2 out of 3 members of SAECS. The third member DAL is bound to Safmarine due to its co-operation in SAFDAL. In SAECS, [description of the voting system and the possibility to influence the decision making process][71]. Even though this might formally give Maersk no better position than currently, Maersk will account for [80-90]% of the SAECS volume. As PONL’s countervailing power will disappear, it will gain de facto control of SAECS.

135. ESAC and SAECS have a market share of above [40-50]% for containerised transport. In the case of the transport of refrigerated goods by reefer container, the combined market share of ESAC and SAECS is nearly [70-80]%. The only independent competitor is MSC, which is particularly weak in the transport of reefer containers. Given that Maersk will de facto control SAECS, only two carriers will remain as main players. This could increase the risk of coordination between Maersk and MSC. Such coordination could be facilitated by the fact the Maersk and MSC had a vessel sharing agreement on the trade between Asia and South Africa which remained in place until the second quarter of 2005.

136. On the basis of the above, on the Europe to Southern Africa trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the changes in the structure of ESAC and SAECS.

Europe – West Africa

137. On the Europe – West Africa trade Maersk has a market share of [30-40]%. Maersk is in the conference EWATA, which has a market share of [60-70]%. PONL is not active on this trade and therefore does not add market shares. Consequently, the concentration does not change Maersk’s market position on the Europe – West Africa trade. On the Europe – West Africa trade the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

North Europe / Mediterranean – Caribbean and Central America

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[10-20]%

([10-20]% (South Bound)

[10-20]% (North Bound)) |[0-10]%

([0-10]% (South Bound)

[0-10]% (North Bound))

|[10-20]%

([10-20]% (South Bound)

[20-30]% (North Bound)) |FWI (Maersk)

WITASS (PONL)

NCS (PONL) |[20-30]%

[20-30]%* |Eurosal/ NCS (PONL) |[20-30]%

|CMA CGM a, b, c

EWL

Hapag Lloyd b,c

Marfret a

Hamburg Süd b,c |[20-30]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of FWI

b = Member of conferences WITASS and NCS

c = Member of Eurosal/NCS consortium

* = Combined market share of WITASS and NCS

138. The aggregated market share of Maersk and PONL ranges between [0-10]% from the Mediterranean to the Caribbean/Central America and [20-30]% from the Caribbean/Central America to North Europe. The parties are stronger on the North Europe - Caribbean/Central America trade ([20-30]% overall) than on the Mediterranean - Caribbean/Central America trade ([10-20]% overall). The most important competitors and their approximate market shares are: CMA CGM ([20-30]%), EWL ([0-10]%), Hapag Lloyd ([0-10]%), Marfret ([0-10]%) and Hamburg Süd ([0-10]%). Of these only EWL operates outside the conferences and consortia to which Maersk or PONL are a member.

139. From the Caribbean/Central America, the transport of refrigerated goods accounts for about [10-20]% of the overall market. The combined market share of the parties in the transport of reefer containers is about [0-10]% if transport in conventional bulk reefer ships is included. The majority of reefer cargo shipped are bananas, which are predominantly shipped in bulk reefer vessels. The combined market share of the parties is about [20-30]% if only reefer containers are considered. Most important competitors for the transport of reefer containers are CMA CGM (market share of approximately [30-40]% for reefer container only), CSAV (about [0-10]%) and EWL (about [0-10]%).

140. Maersk is member of the FWI[72] conference which is active in the French Antilles and does not provide a service to any other port in the Caribbean and Central America. FWI has a market share in the overall trade of about [20-30]%. PONL is member of the Association of the West India Trans-Atlantic Steam Ship Lines (WITASS)[73] and of the New Caribbean Service Rate Agreement (NCS)[74]. WITASS covers 15 countries of the Caribbean and Central America, whereas NCS only covers Puerto Rico and the US Virgin Islands. Both conferences together have a market share in the overall trade of about [20-30]% and important members are CMA CGM, CSAV, Hamburg Süd and Hapag Lloyd.

141. Maersk is member of a vessel sharing agreement with CMA CGM and Marfret which has a market share of about [0-10]%. Maersk has also a slot charter agreement with CMA CGM which covers about [0-10]% of the market and attributes [0-20]% of the slots to Maersk and [80-100]% of the slots to CMA CGM. PONL is member of the Eurosal/NCS Consortium (Eurosal). Its market share is [20-30]% and important members are CMA CGM, CSAV, Hamburg Süd and Hapag Lloyd.

Non-coordinated effects

142. The combined market shares of the parties do not give rise to competition concerns, in particular in view of the existence of several other strong players on this trade.

Coordinated effects

143. The merger would create a link between Maersk and the conferences WITASS and NCS. Competition between the members of these conferences is restricted[75]. Maersk will be able to influence decisions within the conference via PONL’s membership and to benefit from the price fixing and information exchange taking place within the conferences. Maersk would no longer be an independent competitor of these conferences on the overall trade but could use the information to adapt its conduct on the market, in particular in view of a possible extension of its activities to the areas covered by WITASS and NCS.

144. In addition, the merger would strengthen the link between the conferences FWI and WITASS/NCS. Not only CMA CGM but also Maersk would be member of all three conferences. Even though the geographical emphasis of FWI and WITASS/NCS might be different, they are operating on the same market and could collude on the coverage of this market.

145. The combined market share of Maersk and WITASS/NCS would be about [30-40]%, of FWI and WITASS/NCS about [50-60]%[76]. The only independent competitor with a market share above [0-10]% would be EWL.

146. The merger would also create a link between Maersk and the Eurosal consortium. Competition between the members of Eurosal is restricted[77]. Even without integrating itself into the consortium, Maersk will no longer be an independent competitor of Eurosal because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium. Access to information and possibilities to influence are of particular importance in view of a possible extension of its activities to Eurosal’s areas of operation.

147. The combined market share of Maersk and Eurosal is about [30-40]%. The reason for the relatively low market share of Eurosal is that CMA CGM operates most of its volume on this trade outside Eurosal, partly in the vessel sharing agreement with Maersk and Marfret to the French Antilles, partly individually. The combined market share of Maersk, CMA CGM and Eurosal would be about [50-60]%[78]. Again, the only independent competitor with a market share above [0-10]% would be EWL.

148. On the basis of the above, on the Caribbean/Central America trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between the conferences FWI and WITASS/NCS and between Maersk and Eurosal.

North Europe / Mediterranean – East Coast South America

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[10-20]%

([10-20]% (North Bound)

[10-20]% (South Bound)) |[0-10]%

([0-10]% (North Bound)

[0-10]% (South Bound))

|[20-30]%

([10-20]% (North Bound)

[20-30]% (South Bound)) | | |VSA PONL/ Hamburg Süd |[20-30]% |Hamburg Süd

MSC

CSAV

CMA CGM |[20-30]%

[10-20]%

[0-10]%

[0-10]% | |

149. The aggregated market share of Maersk and PONL ranges between [20-30]% on the trade between the Mediterranean and the East Coast of South America and [20-30]% on the trade between North Europe and the East Coast of South America[79]. The most important competitors and their approximate market shares are: Hamburg Süd ([20-30]%), MSC ([10-20]%), CSAV ([0-10]%) CMA CGM ([0-10]%). Of these only Hamburg Süd operates in a consortium to which Maersk or PONL are a member.

150. From the East Coast of South America, the transport of refrigerated goods accounts for about [10-20]% of the overall market. The combined market share of the parties in the transport of reefer containers is about [30-40]% if transport in conventional bulk reefer ships is included. The combined market share of the parties is about [40-50]% if only reefer containers are considered. Most important competitors for the transport of reefer containers are Hamburg Süd (market share of approximately [10-20]% for reefer container only), CSAV (about [10-20]%) and MSC (about [0-10]%).

151. No conference is operating on this trade. PONL is member of a vessel sharing agreement with Hamburg Süd which covers about [20-30]% of the market and operates as a consortium. According to the parties PONL has no own capacity on this trade, but charters slots through the vessel sharing agreement.

Non-coordinated effects

152. The combined market shares of the parties do not give rise to competition concerns. There are indications that for certain shippers, in particular exporters of meat, transport in bulk reefer vessels is hardly a substitute for reefer containers. However, on a possible narrower market for transport of reefer containers only, the parties face sufficient competitive constraints. Several carriers have appreciable market shares for the transport of reefer containers, most important Hamburg Süd. Furthermore, the increment of PONL is relatively low.

Coordinated effects

153. The merger would create a link between Maersk and the consortium between PONL and Hamburg Süd. Competition between the members of the consortium is restricted[80]. Even without integrating itself into the consortium, Maersk will no longer be an independent competitor of the consortium because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium.

154. The combined market share of Maersk and the consortium is slightly below [40-50]% for the overall transport of containers. For the transport of reefer containers only, the combined market share would be about [60-70]%. Competitors CSAV and MSC would have a much lower market share. The competition between the main players Maersk and Hamburg Süd would be restricted.

155. On the basis of the above, on the East Coast South America trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk and the consortium PONL/Hamburg Süd.

North Europe / Mediterranean – West Coast South America

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[20-30]%

([20-30]% (North Bound)

[0-10]% (South Bound)) |[0-10]%

([0-10]% (North Bound)

[0-10]% (South Bound))

|[20-30]%

([30-40]% (North Bound)

[10-20]% (South Bound)) |ESPMC (PONL)

|[30-40]% |Eurosal (PONL) |[30-40]% |CSAVa,b

MSC

CCNI

Hamburg Süd a, b

NYK |[10-20]%

[10-20]%

[10-20]%

[10-20]%

[0-10]% | |a = Member of ESPMC

b = Member of Eurosal

156. The aggregated market share of Maersk and PONL on the overall trade between Europe and the West Coast of South America ranges between [10-20]% from Mediterranean to West Coast South America and [30-40]% from West Coast South America to North Europe. The parties are for containerised transport in general stronger on the North Europe – West Coast South America trade ([30-40]% overall) than on the Mediterranean – West Coast South America trade ([10-20]% overall). The most important competitors and their approximate market shares are: CSAV ([10-20]%) MSC ([10-20]%), CCNI ([10-20]%), Hamburg Süd ([10-20]%) and NYK ([0-10]%). Of these MSC, CCNI and NYK operate outside the conference and consortium to which PONL is a member.

157. From the East Coast of South America, the transport of refrigerated goods accounts for about [10-20]% of the overall containerised market. The combined market share of the parties in the transport of reefer containers is about [10-20]% if transport in conventional bulk reefer ships is included. The combined market share of the parties is about [50-60]% if only reefer containers are considered, with [50-60]% to North Europe and [70-80]% to the Mediterranean. Most important competitors for the transport of reefer containers are CSAV (market share of approximately [0-10]% for reefer container only), CCNI (about [0-10]%), Hamburg Süd (about [0-10]%) and MSC (about [0-10]%).

158. PONL is member of the European/South Pacific & Magellan Freight Conference (ESPMC)[81], which has a market share of about [30-40]%. In addition, PONL is member of Eurosal, which operates both on the Europe – Caribbean/Central America and Europe – West Coast South America trades. Eurosal has a market share of about [30-40]% on the Europe – West Coast South America trade. Eurosal has recently added a new loop on its North Europe – West Coast of South America service, which will increase its weekly capacity for non-reefer as well as for reefer containers, which might in future increase its market share. The main members of ESPMC and Eurosal are identical.

Non-coordinated effects

159. The combined market shares of the parties do not give rise to competition concerns on the overall market for containerised liner shipping. The same applies to the transport of refrigerated goods if reefer vessels are included. However, on a possible narrower market for transport of reefer containers only, the aggregated market shares of the parties are very high. The majority of reefer cargo shipped from the West Coast of South America is bananas. Bananas are mainly shipped in bulk reefers, which carry about [70-80]% of the refrigerated cargo. Bananas can also be transported in reefer containers. About [40-50]% of all cargo carried in reefer containers are bananas. Other cargo is mainly fresh fruit (about [30-40]%) and frozen fish ([0-10]%). Reefer containers do not have specific advantages for the transport of bananas vis-à-vis bulk reefers. Banana transport in bulk reefer is therefore a substitute for reefer containers.

160. However, there are indications that for certain shippers, in particular exporters of subtropical fruits and frozen fish and small shippers, bulk reefer vessels are not a substitute for reefer containers. It should also be considered that it is possible for the parties to identify these shippers and eventually to price discriminate against them. Nevertheless, in view of a sufficient number of competitors with an appreciable market share, the transaction does not lead to a significant impediment of effective competition. This also applies to the West Coast South America to Mediterranean trade. The parties’ market share is high on this thin trade, but PONL increment is small. PONL ships [0 - 3,000] TEU annually on this trade, which is the approximate equivalent of [0-5] loaded vessels. PONL tranships this volume in Rotterdam to the Mediterranean. Other shipping lines already active on the West Coast South America to North Europe trade such as Hamburg Süd or CMA CGM could introduce the same transhipment concept.

Coordinated effects

161. The merger would create a link between Maersk and the conference ESPMC. Competition between the members of ESPMC is restricted[82]. Maersk will be able to influence decisions within the conference via PONL’s membership and to benefit from the price fixing and information exchange taking place within the conferences. Maersk would no longer be an independent competitor of the conference but could use the information to adapt its conduct on the market.

162. The merger would create a link between Maersk and Eurosal. Competition between the members of Eurosal is restricted[83]. Even without integrating itself into Eurosal, Maersk will no longer be an independent competitor of Eurosal because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium.

163. As shown in the table above, the combined market share of Maersk and the conference or the consortium would be about [50-60]% on the overall trade and up to [60-70]% from Northern Europe to the West Coast of South America and up to [70-80]% on the overall trade for the transport of reefer containers only. Maersk would lose its position as the most important competitor of ESPMC and Eurosal. Significant competitors such as CSAV and Hamburg Süd would become linked to Maersk. Competitors outside Eurosal with a market share above [0-10]% on the overall trade would be MSC, CCNI and NYK, but the market share of each of them is much lower than the combined market share of Maersk and ESPMC/Eurosal. Furthermore, CCNI operates the consortium “Med Andes” with CSAV and is thereby linked to Eurosal.

164. On the basis of the above, on the West Coast South America trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk and ESPMC as well as Eurosal.

North Europe / Mediterranean – Australia/New Zealand

Market shares

Maersk |PONL |Combined Maersk / PONL |Conferences to which parties are member |Consortia to which parties are member |Individual carriers | |[10-20]%

([10-20]% (South Bound)

[10-20]% (North Bound)) |[20-30]%

([20-30]% (South Bound)

[20-30]% (North Bound))

|[30-40]%

([30-40]% (South Bound)

[30-40]% (North Bound)) |EANZC/ANZELA

(both PONL) |[50-60]%* |NANZC (PONL) |[50-60]% |CP Ships a

MSC

Hapag Lloyd a

CMA CGM a

Hamburg Süd a

OOCL |[10-20]%

[10-20]%

[0-10]%

[0-10]%

[0-10]%

[0-10]% | |a = Member of EANZC, ANZELA and NANZC

* = Combined market share of EANZC and ANZELA

165. The aggregated market share of Maersk and PONL ranges between [30-40]% on the trade between the Mediterranean and Australia/New Zealand and [30-40]% on the trade between North Europe and Australia/New Zealand[84]. The most important competitors and their approximate market shares are: CP Ships ([10-20]%), MSC ([10-20]%), Hapag Lloyd ([0-10]%), CMA CGM ([0-10]%), Hamburg Süd ([0-10]%) and OOCL (about [0-10]%)[85]. Of these only MSC and OOCL operate outside the conferences and the consortium to which PONL is a member.

166. From Australia/New Zealand to Europe, the transport of refrigerated goods accounts for about [20-30]% of the overall market. The combined market share of the parties in the transport of reefer containers is about [40-50]% if transport in conventional bulk reefer ships is included and about [60-70]% if only reefer containers are considered. Most important competitors for the transport of reefer containers are CP Ships (about [10-20]% for reefer containers only) and CMA CGM (about [0-10]%), MSC (about [0-10]%) and Hapag Lloyd (about [0-10]%)[86].

167. PONL is member of the Europe to Australian and New Zealand Conference (EANZC)[87] and to the Australia/New Zealand to Europe Liner Association (ANZELA)[88], both conferences operating on this trade. EANZC covers the trade direction to Australia and New Zealand, whereas ANZELA covers the trade direction to Europe. Their combined market share on the overall trade is [50-60]%. PONL is also member of the New Australia/New Zealand Consortium (NANZC)[89], which has a market share of about [50-60]%. Membership of the conferences and the consortium is nearly identical[90]. There are no other conferences or consortia operating on this trade. Maersk is an independent carrier on this trade, i.e. does not belong to any conferences or consortia.

Non-coordinated effects

168. The aggregated market share of the parties on the market for containerised liner shipping is not likely to give rise to competition concerns on this trade. There are a sufficient number of competitors with an appreciable presence on these trades which can constrain the behaviour of the parties. For the transport of reefer containers, the position of the parties is substantially stronger. There are strong indications that for certain shippers, in particular the meat exporters, conventional bulk reefer vessels are not a substitute to reefer containers. Nevertheless, even for transport in reefer containers, the parties would face competition from several carriers with an appreciable reefer capacity.

169. Furthermore, Maersk operates on these trades only an indirect service through transhipment at Singapore, Tanjung Pelepas or Kaohsiung. It is reported that transhipment is frequent on trades to and from Australia/New Zealand[91]. This means that the barriers to entry are relatively low on these trades. Other carriers which are already active on the Europe/Far East trade could offer containerised liner services including reefer containers to and from Australia/New Zealand through transhipment via Asia.

Coordinated effects

170. The merger would create a link between Maersk and the conferences EANZC and ANZELA. Competition between the members of the conferences is restricted[92]. Maersk will be able to influence decisions within the conferences via PONL’s membership and to benefit from the price fixing and information exchange taking place within the conferences. Maersk would no longer be an independent competitor of the conferences but could use the information to adapt its conduct on the market.

171. The merger would also create a link between Maersk and the NANZC consortium. Competition between the members of NANZC is restricted[93]. Even without integrating itself into NANZC, Maersk will no longer be an independent competitor of NANZC because it controls a member of the consortium. Through PONL, it has access to commercially sensitive information about its competitors enabling it over time to adjust its own behaviour in the market accordingly. Furthermore Maersk could influence operational decisions within the consortium.

172. The combined market share of Maersk and the conferences or the consortium to which PONL is a member would be about [60-70]%. In the case of reefer containers, the combined market share of Maersk and the conferences or the consortium would be even about [70-80]%. Maersk would lose its position as the most important competitor of EANZC/ANZELA and NANZC. The only independent competitor with a market share above [0-10]% would be MSC.

173. While there is still the possibility of market entry through transhipment via Asia, a potential entrant will face a market structure characterised by close co-operation between Maersk and all the members of EANZC/ANZELA and NANZC. If he chooses to become member of EANZC/ANZELA and NANZC, the market structure will not change. When considering market entry as an independent player, this market structure will have a deterrent effect and increase the barriers to entry.

174. On the basis of the above, on the Australia/New Zealand trade the transaction raises serious doubts as to its compatibility with the common market and the functioning of the EEA Agreement, stemming from the coordinated effects following from the link between Maersk and EANZC/ANZELA as well as NANZC.

Container terminal services

175. Maersk is the third biggest container terminal operator with a share of the worldwide volume of about [0-10]%[94]. Most of the volume of Maersk’s container terminals is captive, i.e. the terminal services are provided to carriers of Maersk. PONL has a limited importance with a share of the worldwide volume of less than [0-10]%.

176. In Northern Europe Maersk currently controls container terminals in Aarhus, Bremerhaven and Rotterdam. A terminal in Zeebrugge is expected to become operational in mid-2006. PONL controls no container terminal which is currently active in Northern Europe, but will jointly control the Euromax terminal which will be operational in 2008[95]. Maersk’s market share for transhipment traffic is about [0-10]% if captive volumes are excluded and about [0-10]% if captive volumes are included. For hinterland traffic in the Hamburg-Le Havre range, the market shares are below [0-10]% excluding captive volumes and about [10-20]% including captive volumes[96]. The hypothetical increment of Euromax in 2008 is under any possible market definition below [0-10]%[97].

177. In the Mediterranean Maersk controls container terminals in Algeciras, Tangier, Constantza and East Port Said. PONL has joint control of the container terminal in Cagliari, which is only active in transhipment. The parties’ combined market share for transhipment traffic is below [0-10]% if captive volume is excluded and below [20-30]% if captive volume is included, with an increment of PONL below [0-10]%.

178. The combined market shares of the parties’ are not indicative of dominance in container terminal services and will not enable Maersk to foreclose competing carriers from the access to stevedoring services in Northern Europe or the Mediterranean. Furthermore, there is no indication that after the transaction Maersk would be in a position to foreclose other container terminals from their customer base. This was confirmed by the market investigation.

179. On the market for container terminal services, the concentration does therefore not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

In-land transportation of containerised goods

180. Both parties are active in various segments of in-land transportation of containerised goods within the EU including rail transport, road transport and in-land waterway transport. More than [60-90]% of their in-land transportation business is carried out as in-house (captive) activity. The combined market shares of the merging parties are below [0-10]% even when a narrow market definition according to individual means of transport in individual Member States is adopted. Furthermore, there is a number of important competitors active in all segments of in-land transportation in Europe. Therefore, under any possible definition of the market for in-land transportation of containerised goods, the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Logistics services

181. Both parties are active in logistics services that are largely carried out as in-house activities – [60-90]% of Maersk’s and [50-60]% of PONL’s logistics activities are for captive use. The combined market shares of the parties both in Europe and in individual Member States are well below [0-10]%. Furthermore, the companies will face competition both from other containerised shipping companies with integrated logistics activities and from specialised logistics companies or freight forwarders. Therefore, on the market for logistics services the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Air transport

182. Both parties are active in the air passenger transport – Maersk through its subsidiary Maersk Air[98] and PONL through Martinair, a company jointly controlled by Air France/KLM and PONL. It has been acknowledged by the Commission that Martinair is not integrated with its parent company Air France/KLM and operates independently[99]. Therefore, the assessment of the concentration takes into account only the combination of Maersk Air and Martinair. In general, Maersk Air operates short-haul flights from Copenhagen and Billund in Denmark, whereas Martinair operates short- and long-haul flights from Amsterdam and Brussels, but not to Denmark. As Martinair does not operate from or fly to any airport which is in the catchment area of the airports of Copenhagen or Billund, there are no horizontal overlaps between the parties.

183. Both parties are also active in the air cargo transport. Maersk offers air cargo services only within Europe, whereas Martinair operates scheduled flights to North America, the Middle East, the Far East, Africa and Australia with important hubs in Amsterdam (the Netherlands), Miami (USA), Nairobi (Kenya) and Hong Kong. There are horizontal overlaps between the parties only on the intra-European market with a combined market share well below [10-20]%.

184. Therefore, in the air transport sector the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

Harbour towage

185. Maersk is active in the harbour towage services in more than 30 ports in Northern Europe (in Denmark, United Kingdom, Sweden and the Netherlands) and one port in Southern Europe (Lisbon in Portugal). 10 of these ports also have container terminal facilities. PONL is not active in harbour towage, nevertheless there is a vertical relationship between container liner shipping activities of the parties and harbour towage services provided by Maersk to container ships.

186. Under the narrowest geographical market definition limited to individual ports the market share of Maersk is high in several ports and in some ports Maersk is currently even the only provider of these services. However, the 10 ports in which Maersk provides harbour towage services represent only a negligible part of the total containerised volume[100]. Maersk is already now vertically integrated. There are no indications that the addition of PONL’s carrier business would change in an appreciable way its ability or incentive to foreclose rival carriers from harbour towage services or harbour service towage providers from their customers.

187. Therefore, even under the narrowest market definition, in the markets for harbour towage services the concentration does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement.

VI. COMMITMENTS SUBMITTED BY THE PARTIES

188. In order to remove the serious doubts identified in relation to the containerised liner shipping services on the trades mentioned above, Maersk has submitted commitments pursuant to Article 6(2) of Council Regulation (EC) No 139/2004. The commitments are attached to this decision and form an integral part thereof.

189. Maersk commits to withdraw PONL from the following liner shipping conferences at the earliest date permitted after acquisition of control of PONL:

190. Australia/New Zealand to Europe Liner Association (ANZELA)

191. Europe to Australia and New Zealand Conference (EANZC)

192. Europe East Africa Conference (EEAC)

193. European/South Pacific & Magellan Fright Conference (ESPMC)

194. North Europe/Djibouti Conference (NE/DC)

195. New Caribbean Service Rate Agreement (NCS)

196. Association of the West India Trans-Atlantic Steam Ship Lines (WITASS)

197. Maersk commits to withdraw PONL from the following liner shipping consortia at the earliest date permitted after acquisition of control of PONL:

198. Eurosal/NCS Consortium (Eurosal)

199. Grand Alliance

200. New ANZ Consortium (NANZC)

201. Slot Charter Agreement between PONL and MSC on Europe – East Africa Trade (SCA MSC)

202. Vessel Sharing Agreement between PONL and Hamburg Süd on the Europe – East Coast South America Trade (VSA Hamburg Süd)

203. In order to address the serious doubts identified in relation to the Europe – South Africa trades, Maersk commits to divest the business of PONL on the trade between Europe and South-Africa. This includes in particular all vessels PONL operates on this trade (three time-chartered vessels), a number of owned or leased containers corresponding to PONL’s capacity on this trade (also its reefer containers) as well as personnel and contracts attributable to this trade. The purchaser also has the possibility to become a member of SAECS or, if SAECS is terminated or Maersk has withdrawn from SAECS, to enter into a vessel sharing agreement with Maersk.

VII. ASSESSMENT OF THE COMMITMENTS

North Europe – North America

204. The Commission considers that the commitment to withdraw PONL from the Grand Alliance is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk and the Grand Alliance. The market share of Maersk/PONL will be about [10-20]% and the aggregated market shares of the shipping lines which are member of Grand Alliance (reduced by PONL) will be about [20-30]%. Maersk will therefore face effective competition from the members of the Grand Alliance as well as from other consortia and independent carriers.

North Europe / Mediterranean – Middle East

205. The Commission considers that the commitment to withdraw PONL from the NE/DC conference and the Grand Alliance is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk on the one hand and the NE/DC conference and the Grand Alliance on the other hand Furthermore it will severe the links between the conferences EMERA and NE/DC. Given the low market share of EPIC III, withdrawal of PONL from this consortium is not necessary. Maersk will face effective competition from MSC and to a lesser extent USAC and the Grand Alliance.

North Europe / Mediterranean – East Africa

206. The Commission considers that the commitment to withdraw PONL from EEAC and the slot charter agreement with MSC is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk on the one hand and EEAC, in particular MSC on the other hand. The market share of Maersk/PONL will not be higher than the aggregated market shares of the shipping lines which are member of EEAC (reduced by PONL). Maersk will therefore face effective competition from the members of EEAA, in particular MSC.

North Europe / Mediterranean – South Africa

207. The Commission considers that the commitment to divest the business of PONL on this trade is sufficient to remove the serious doubts identified. Due to the divestiture, Maersk will not enlarge its market share on this trade as result of the transaction. As a third carrier will take over PONL’s business, the currently existing limited competition between PONL and Maersk will be preserved in the form of competition between the purchaser and Maersk. If the purchaser chooses to keep PONL’s business within SAECS, the close co-operation within SAECS would restrict competition between the purchaser and SAECS, however not to a greater extent than competition is currently restricted between Maersk and PONL. The divestiture therefore ensures that the transaction does not worsen the current competitive situation.

Europe – Caribbean/Central America

208. The Commission considers that the commitment to withdraw PONL from WITASS, NCS and Eurosal is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk and WITASS, NCS and Eurosal. Maersk might integrate PONL’s volume into FWI. In this case, the market share of FWI would still remain below [30-40]% on the overall market for containerised liner shipping. The relatively limited increment will not appreciably strengthen Maersk’s position within FWI. FWI has 4 members and [description of the voting system].

Europe – East Coast South America

209. The Commission considers that the commitment to withdraw PONL from the vessel sharing agreement with Hamburg Süd is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk and Hamburg Süd. As PONL has no own capacity on this trade, but charters slots through the vessel sharing agreement, the commitment will have the result that there is no increment in Maersk’s market share after the withdrawal.

Europe – West Coast South America

210. The Commission considers that the commitment to withdraw PONL from ESPMC and Eurosal is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk and the conference as well as the consortium. Maersk will remain an independent competitor of the conference and the consortium. On the overall trade the market share of Maersk/PONL will remain below the aggregated market shares of the shipping lines which are member of ESPMC and Eurosal (reduced by PONL). Maersk will therefore face effective competition from the members of ESPMC and Eurosal as well as from MSC and CCNI.

Europe – Australia/New Zealand

211. The Commission considers that the commitment to withdraw PONL from EANZC, ANZELA and NANZC is sufficient to remove the serious doubts identified. The withdrawal will severe the link between Maersk on the one hand and EANZC, ANZELA and NANZC on the other hand. Maersk will remain an independent competitor of the conferences and the consortium.

212. Some competing carriers and some shippers however are of the opinion that in case of an immediate withdrawal of PONL from NANZC the volume of the remaining consortium members would not be sufficient to maintain a competitive service on this trade. The reason would be the long distance of the trade and a relatively small market volume. Even though PONL is currently the most important member of NANZC, in particular CP Ships and Hapag Lloyd have a