94/985/EC: Commission Decision of 21 December 1994 relating to a proceeding pursuant to Article 85 of the EC Treaty (IV/33.218 - Far Eastern Freight Conference) (Only the German, English, Danish, French, Italian and Dutch texts are authentic) (Text with EEA relevance)
Date: 1994-12-21
Institutions: European Commission
Subjects: application of EU law, fixing of prices, price agreement, restriction on competition













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31994D0985

94/985/EC: Commission Decision of 21 December 1994 relating to a proceeding pursuant to Article 85 of the EC Treaty (IV/33.218 - Far Eastern Freight Conference) (Only the German, English, Danish, French, Italian and Dutch texts are authentic) (Text with EEA relevance)  


Official Journal L 378 , 31/12/1994 P. 0017 - 0036 





COMMISSION DECISIONof 21 December 1994relating to a proceeding pursuant to Article 85 of the EC  Treaty(IV/33.218 - Far Eastern Freight Conference)(Only the Danish, German, English, French,  Italian and Dutch texts are authentic)(Text with EEA relevance)(94/985/EC)THE  COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 1017/68 of 19 July 1968 applying rules of competition  to transport by rail, road and inland waterway (1), as last amended by the Act of Accession of  Greece, and in particular Articles 2, 5 and 11 (1) thereof, Having regard to Council Regulation (EEC) No 4056/86 of 22 December 1986 laying down detailed rules  for the application of Articles 85 and 86 of the Treaty to maritime transport (2), and in  particular Articles 3 and 11 (1) thereof, Having regard to the complaint lodged pursuant to Article 10 of Regulation (EEC) No 1017/68, Having regard to the Commission Decision of 18 December 1992 to initiate proceedings in this case, Having given the undertakings concerned the opportunity to make known their views on the objections  raised by the Commission and to present any other comments in accordance with Article 26 of  Regulation (EEC) No 1017/68 and with Commission Regulation (EEC) No 1630/69 of 8 August 1969 on the  hearings provided for in Article 26 (1) and (2) of Council Regulation (EEC) No 1017/68 of 19 July  1968 (3), Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions in the  Transport Industry on 23 November 1994, Whereas: THE FACTS I. The complaint (1) On 28 April 1989, the Commission received a complaint from the  Bundesverband der Deutschen Industrie (BDI), the Deutscher Industrie- und Handelstag (DIHT) and the  Bundesverband des Deutschen Gross- und Aussenhandels (BGA), the sponsoring organizations of the  Deutsche Seeverladerkomitee (DSVK or German Shippers' Council), concerning certain price-fixing  activities of the members of the Far Eastern Freight Conference (FEFC) relating to multimodal  transport. The Annex contains a list of the members of the FEFC. (The Commission was informed on 21  November 1994 that Lloyd Triestino had ceased to be a member of the FEFC on 31 January 1994 and  that Croatia Line had ceased to be a member of the FEFC on 28 May 1994.)(2) The complainants  listed the following five elements as making up a door-to-door, or multimodal, transport service: (a) inland transport to the port; (b) cargo handling in the port (transfer from the mode of inland transport to the vessel); (c) sea transport (maritime transport from one port to another); (d) cargo handling in the port of destination (transfer from the vessel to the mode of inland  transport); (e) inland transport from the port of destination to the place of final destination. (3) The BDI/DSVK complained that the block exemption for liner conferences, contained in Article 3  of Regulation (EEC) No 4056/86, covered only the third of these five elements, namely sea  transport, but that the members of the FEFC agreed between themselves prices not only for sea  transport but also for inland transport and cargo handling operations. (4) The complainants argued that since the scope of Regulation (EEC) No 4056/86 is 'international  maritime transport services from or to one or more Community ports, other than tramp vessel  services' (see Article 1 (2) of that Regulation), the scope of the block exemption contained in  Article 3 thereof could not be wider than the scope of the Regulation itself. In their opinion, the  applicable regulation was Regulation (EEC) No 1017/68, Article 2 of which prohibits restrictive  practices including price-fixing and which does not grant an exemption for the type of price-fixing  in respect of inland transport in which the members of the FEFC engaged. (5) The complainants requested the Commission to take appropriate action in order to put an end to  the price-fixing activities of the FEFC relating to the provision of inland transport services. II. The parties (6) The parties to whom this Decision is addressed are members of one or more of  the individual liner conferences included under the overall umbrella of the Far Eastern Freight  Conference. The maritime transport services they provide fall within the following geographic  scope: Eastbound From certain ports in the United Kingdom, Ireland, Norway, Sweden, Finland, Denmark,  Germany, Holland, Belgium, France (English Channel and Atlantic coast), Iceland and Poland to  certain ports in Malaysia, Singapore, Thailand, Hong Kong, Japan, Taiwan, Republic of Korea,  Democratic People's Republic of Korea, People's Republic of China (with transhipment), Macau,  Indonesia (with transhipment), Democratic Kampuchea, Vietnam, Laos, Myanmar, Brunei, and the  Philippines. Westbound From certain ports in Malaysia, Singapore, Thailand, Hong Kong, Japan, Taiwan, Republic  of Korea, Democratic People's Republic of Korea, People's Republic of China (with transhipment),  Macau, Indonesia (with transhipment), Democratic Kampuchea, Vietnam, Laos, Myanmar, Brunei, and the  Philippines to certain ports in Europe, the Black Sea ports (other than CIS ports), all  non-European ports on the Mediterranean Sea (other than Israeli ports) and Moroccan ports on the  Atlantic Ocean. III. The services in question (i) Services and geographic market (7) The services offered by  the members of the FEFC are the following: (a) maritime transport services; (b) port handling services; and(c) inland transport services. (8) The third of these three services is, in principle, optional: shippers may decide whether to  use the inland transport services offered by members of the FEFC ('carrier haulage') or those  offered by inland hauliers or freight forwarders ('merchant haulage'): see point 16. (9) This Decision does not call into question the fact that the members of the FEFC are permitted,  pursuant to Article 3 of Regulation (EEC) No 4056/86, to operate under common or uniform rates for  the provision of liner maritime transport services. Moreover, this Decision does not address the  question whether price-fixing agreements relating to port handling services fall within the scope  of application of Article 3 of Regulation (EEC) No 4056/86. (10) The services to which this Decision relates are the inland transport services provided within  the territory of the European Community to shippers as part of a multimodal transport operation for  the carriage of containerized cargo between northern Europe and the Far East by shipping lines  which are members of the FEFC. (11) For present purposes, the geographic market for the supply of the services in question is that  in which the inland carriage of containers is undertaken by or on behalf of the members of the FEFC  between ports of operation in those countries listed in paragraph 6 and inland points served by  those ports. (ii) The provision of inland transport services by shipowners (12) Traditionally, shippers were  offered transport on a mode-by-mode basis, that is to say that transport providers did not usually  provide more than one mode of transport. All charges until cargo was received on board ship were  for the account of the shipper and maritime transport services were generally contracted for  without inland services. (13) This meant that, as a rule, shippers undertook the organization of the initial inland segment  of a journey (namely delivery to the ship's rail) by obtaining their own road or rail transport or  by turning to freight forwarders. Either the shipper or the consignee would do likewise in the  country of destination. (14) In the 1960's, containerization (and other forms of unitization) brought about a  cargo-handling revolution. The use of containers made easier the transfer from one mode of  transport to another, thereby facilitating loading and unloading operations. This encouraged liner  shipping companies to become involved in other modes of transport and to begin to offer  door-to-door services, by adding inland services to maritime services. The cargo handling  revolution had complicated the question of the attribution of liability, since damage to cargo was  frequently only discovered once the container was opened at the place of destination. For this  reason, shippers were in favour of door-to-door transport being carried out by a multimodal  transport operator, such as a shipping line, as this solved the question of liability. (15) Apart from the unitization of cargo and the consequent development of specialized equipment,  one of the main characteristics of multimodal transport is a single through bill of lading covering  the transport from door-to-door. This document records the terms of the contract between the  shipper and the carrier and provides for clear attribution of liability, as well as clearly setting  out total transport costs. (16) The cargo-handling revolution has affected all modes of transport, but especially liner  shipping. It has affected not only shippers and shipowners but also intermediaries such as freight  forwarders which, since the development of widespread multimodal transport, are now in direct  competition with shipping lines in the organization of all or part of a multimodal transport  service. Inland carriage by or on behalf of shipping lines is known as 'carrier haulage' and inland  carriage arranged by shippers, or by freight forwarders acting on behalf of shippers, is known as  'merchant haulage'. (17) The choice between merchant haulage and carrier haulage is left open to shippers. This was  described in the following terms in the expert report prepared for the FEFC and presented to the  Commission during the course of the administrative proceedings in this case (1). '4.41. Optionality: Although carrier haulage is often the preferred option, the availability of  merchant haulage has a number of very important aspects, many of which go back to the early days of  containerization. 4.42. First, when the conferences first offered through-transport services in the late 1960's and  early 1970's, they still carried the vast majority of liner cargoes on their respective routes and  were in a dominant position. It was important that shippers did not consider that they were being  asked to support services which abused this position. In addition, where the conferences moved into  new commercial fields, such as inland transport, it was important that the service was offered  under conditions which would attract customers and expand the idea of integrated distribution  services. This included the offer of reasonable rates for carrier haulage. But this was not enough,  and it was important that shippers should retain the option to carry on as before and continue to  arrange their own merchant haulage if they so wished. 4.43. A second important point concerns foreign exchange costs. All importers of goods incur  foreign exchange costs when buying abroad, and this includes sea freight costs. However, under the  conventional system local inland transport costs were paid for in the national currency. Traders  and national governments could reasonably have been expected to object to a system which, as a  result of incorporation of local movements into a unified tariff system, inland costs would be  transferred into a foreign currency. A separate inland tariff allows import legs to be invoiced  separately and to be paid in local currency, without disturbing the physical and commercial  through-transport attributes of the through journey and through bill of lading. 4.44. A third aspect concerns the position of fob buyers. Some importers, usually very large and  powerful ones, choose to nominate their own ocean carriers, usually national lines of their own  country. In choosing the carrier on the sea leg of a through journey, they influence the inland leg  in their own country. They are not usually interested in how the exporter moves the goods to the  port of exit in the exporting country, leaving it to him to determine whether to do it himself by  merchant haulage or to arrange for the through-transport operator to do it by carrier haulage. Fob  buying is neutral with respect to the choice between carrier or merchant haulage at either end of  the route, but separate inland tariffs are necessary to make available this option.'(18) One of  the obligations attached to the group exemption for liner conferences is that shippers must have  freedom of choice with respect to who carries out their inland haulage. This obligation is  contained in Article 5 (3) of Regulation (EEC) No 4056/86 which provides as follows: 'Transport users shall be entitled to approach the undertakings of their choice in respect of  inland transport operations and quayside services not covered by the freight charge or charges on  which the shipping line and the transport user have agreed.'(19) Where a shipper chooses carrier  haulage, the transport of the container from the point of origin to the ship's rail is not normally  physically carried out by the shipping line concerned or even by an associated undertaking of the  shipping line concerned. Although the planning and tracking of the container's inland journey is  carried out by the shipping line, the transport service itself is almost always subcontracted to an  independent road or rail operator by the shipowner. A small number of maritime companies have also  set up land transport subsidiaries. (20) In the case of the FEFC, the price paid by the shipper for the inland movement is not that  negotiated between the shipping line and the land transport undertaking to which it has  subcontracted the task, but the rate which appears in the conference's inland tariff. That tariff  also reflects charges for other inland activities undertaken for the shipper by or on behalf of the  members of the FEFC. Customarily, inland rates are calculated in the local currency of the country  where inland haulage takes place, and not in US dollars, the currency most commonly used for  calculating sea rates. (21) Merchant haulage, on the other hand, is undertaken in a variety of different ways. Unless a  shipper carries out the inland transport itself, delivering the container to a terminal operator  for loading onto a vessel, dealing with the paperwork and contracting directly with the shipping  line for the maritime leg, it may use the services of a freight forwarder, a road haulier or a  railway company. (22) Freight forwarders offer a variety of services ranging from the preparation of documentation  and the booking of cargo space on vessels to acting as fully-fledged non-vessel operating  multimodal transport operators (NVO-MTOs). In the latter case, the freight forwarders offer the  same services as liner shipping companies which offer multimodal services, but instead of operating  vessels they charter slots from vessel operating carriers. (23) The increase in competition between freight forwarders and liner shipping companies since the  advent of containerization has been a marked feature of the industry and has been, in large part,  brought about by the existence of excess vessel capacity which the lines have been willing to  dispose of to freight forwarders at favourable rates. (24) Freight forwarders may or may not operate inland transport services themselves: if they do  not, they subcontract these services in the same way as do vessel operating multimodal transport  operators. Freight forwarders play a particularly important role with respect to the consolidation  and transport of smaller shipments (less-than-container-loads) into full container loads. (25) The parties have argued in their reply to the Statement of Objections and at the oral hearing  that the product that the FEFC lines provide is not an inland transport product but is either a  port-to-port product or, more commonly, a through-transport product. In particular, the parties  point out that they do not offer land transport services unless they are also supplying maritime  transport services and terminal handling services. (26) It is clear that for door-to-door or through-transport, shippers are free to choose whether to  use merchant haulage or carrier haulage (see paragraphs 17 to 20). In making this choice they will  take into account a number of factors, including price. As indicated above, the price of carrier  haulage is always quoted in the tariff separately from the price of other services and indeed is  quoted in another currency. However, the physical and technical characteristics of the two types of  haulage are such that they are functionally interchangeable. (27) The shipper is therefore uninterested in the question whether shipping lines supply carrier  haulage services other than as part of a through-transport multi-modal service but chooses between  what appear to him to be two substitutable products. In this respect, the FEFC lines are supplying  to shippers an inland transport product. (28) This analysis is borne out by the fact that the parties have emphasized the competitive nature  of carrier haulage and merchant haulage prices. According to the FEFC (1), some 70 % of shippers  using FEFC members for the maritime transport of containers use carrier haulage, although this  proportion varies from time to time and from country to country. Gilman and Graham state at  paragraph 6.04 of their Report that: 'The carrier haulage offered by conference lines has to remain broadly competitive in terms of the  combination of service quality and price, with independent lines and merchant haulage.'(29) This  indicates that the responsiveness of sales of one type of haulage to price changes in the other is  high, demonstrating that their demand substitutability is also probably high. The parties have  argued that because of this pressure from merchant haulage, inland transport rates agreed within  the framework of the FEFC tend to be those of the most efficient member. (iii) Competitive conditions in the provision of inland transport services (30) The FEFC tariff  for maritime transport services sets different rates for different products on a basis related to  their value, although the range of tariffs is considerably narrower than the range of commodity  values. In other words, freight rates are higher for high-value commodities than for low-value  commodities. On the other hand, inland rates are not quoted by commodity and do not vary according  to the value of the contents of the container, although variations may be encountered, depending on  whether the container is a 20-foot equivalent unit (TEU) or a 40-foot equivalent unit (FEU). (31) Except for an exemption for certain agreements between small and medium-sized transport  undertakings, no group exemption for price fixing by inland carriers has been granted pursuant to  Regulation (EEC) No 1017/68. Moreover, competition has not permitted the maintenance of  differentiated or discriminatory rates in those few cases in which they were imposed, such as  national regulation of railway rates, where such rates had to be abandoned because of competition  from road transport. (iv) The inland activities of the members of the FEFC (32) Apart from the collective fixing of  prices and conditions for carrier haulage, no inland transport activities are directly or  indirectly organized through the medium of the FEFC. The member lines of the FEFC negotiate  individually the terms and conditions on which they buy inland transport. Until now, only some  member lines of the FEFC have invested in an own inland transport infrastructure (such as depots)  or equipment (such as tractors), the most notable being P& O's inland depots in the United Kingdom  and the various carrier-owned road haulage companies (such as Nedlloyd, Maersk). However, many of  them have made considerable investments in containers and logistical control systems which are used  not only for the maritime transport services the lines provide but also for the inland transport  services. (33) According to the FEFC (1), its share of the liner trade for the routes within its geographic  scope in 1992 was about 58 %. Again according to the FEFC, some 70 % of this share (that is to say,  some 38,5 % of the whole trade) was in 1993 moved inland by carrier haulage. In 1991, carrier  haulage in northern Europe by the member lines of the FEFC accounted for some 1 015 208 TEUs or  approximately 9 276 653 weight tons. Approximately 89 % of this was carried wholly or in part  within the territory of the European Community. (34) The Commission has analysed data supplied by 10 of the largest members of the FEFC (2) in  order to assess the importance of inland transport operations in relation to overall costs of  providing multimodal transport services. The following table sets out an average for their cost  structures on the north Europe/Far East trades: Sea 36,5 %Inland 18,6 %Terminals 27,1 %Sales 13,9 %Others 3,9 %(35) For the 10 lines whose  data has been analysed the overall cost of supplying inland transport services in 1992 amounted to  some ECU 477 200 000 (using exchange rates as at August 1994). (36) In addition to direct inland transport costs, the figure for inland transport costs given  above includes the capital costs of containers on land (typically, some 60 % of all containers) as  well as the management of those containers on land and the costs of providing container yards. The  direct inland transport costs probably account for some 8 % of total costs. (37) Some part of the figures for terminals, sales and other costs should also be apportioned to  the cost of supplying inland transport services since, for example, terminal costs include the cost  of hauling containers between ports. Also, sales costs include the cost of selling carrier haulage  services and other costs include administration costs. IV. The Agreement (38) The Far Eastern Freight Conference is the name given to a series of  associated liner shipping conferences (1) with a secretariat in the United Kingdom and area offices  in Hong Kong, Korea, Tokyo, Singapore, Paris and Rotterdam. (39) The shipping lines which are members of the FEFC have an agreed tariff as well as other  matters such as agreed conditions of entry. The FEFC's tariff is currently contained in a document  entitled NT90 which was introduced with effect from 1 January 1990. That document sets out the  general terms and conditions of carriage including payment terms. (40) NT90 sets out rates for the services provided by the members of the FEFC, including rates for  maritime transport, inland transport and terminal handling and other charges. In respect of some  charges, a rate is not specified but it is stated that member lines should not charge below the  cost they incur in providing the service. (41) Conference price fixing for maritime transport - the tariff - was extended to inland rates by  the FEFC in a general manner at the outset of containerization, in around 1971. NT90 reflects this  by setting out the tariff in five parts, two of which concern the inland transport components of a  door-to-dor transport operation (that is, inland transport in the countries of origin and  destination). LEGAL ASSESSMENT I. Article 85 (1) (42) The member shipping lines of the FEFC are undertakings  within the meaning of Article 85 (1) of the Treaty. Their price-fixing role in the inland transport  services supplied within the territory of the Community to shippers in combination with other  services as part of a multimodal transport operation for the carriage of containerized cargo  between northern Europe and the Far East (2) by shipping lines which are members of the FEFC  ('carrier haulage services'), as set out in NT90, constitute an agreement between those  undertakings falling within the scope of application of Article 85 (1). (i) Restriction, prevention or distortion of competition (43) Agreements which directly or  indirectly fix selling prices or any other trading conditions are specifically referred to as a  restriction of competition in Article 85 (1) (a). The European Court of Justice has held on the  subject of price competition: 'The function of price competition is to keep prices down to the lowest possible level and to  encourage the movement of goods between the Member States thereby permitting the most efficient  possible distribution of activities in the matter of productivity and the capacity of undertakings  to adapt themselves to change.' (3)(44) There is no need to wait to observe the concrete effects  of an agreement once it appears that it has as its object the prevention, restriction or distortion  of competition (4). (45) In the present case, the restriction of competition between the members of the FEFC with  regard to prices for the inland leg of a multimodal transport operation is likely to be appreciable  because of the very large number of containers and the consequent costs involved (see paragraphs 33  to 37). (ii) Effect on trade between Member States (46) According to the case-law of the Court, the test  of effect on trade between Member States is met whenever it is possible to foresee with a  sufficient degree of probability, on the basis of a set of objective factors of law or fact, that  the agreement or concerted practice in question may have an influence, direct or indirect, actual  or potential, on the pattern of trade in goods or services between Member States (5). (47) The Commission considers that the agreement between the members of the FEFC to fix prices for  carrier haulage services is capable of appreciably affecting, and has appreciably affected, trade  between Member States in the following ways. Such services frequently involve the carriage of goods  between Member States. (48) The agreement involves shipping lines operating in several Member States and restricts  competition between such lines in respect of the price at which each of them offers transport  services involving an element of inland carriage. The elimination or restricton of price  competition in inland transport services between those companies reduces significantly the  advantages which would accrue to the more efficient of them. (49) This affects the number of multimodal transport operations undertaken by each shipping line  which would be expected in the absence of the agreement. This restriction of competition between  shipowners operating in several Member States consequently influences and alters trade flows in  transport services within the Community, which would be different in the absence of the agreement. (50) Those changes in the normal pattern of competitive behaviour by which more efficient companies  enjoy increases in market share may also influence competition between ports in different Member  States, by artificially increasing or decreasing the volume of cargo which flows through them (1)  and the market shares of shipping lines operating out of those ports. (51) The system of port equalization is likely to increase or decrease cargo flows at certain  ports. Under this system carrier haulage rates are based on transport to the nearest  conference-approved port regardless of the actual port of loading or unloading. This system may  bring about changes in the capacity made available at each port. This may in turn cause deflections  of trade between points in Europe and ports in northern Europe from some ports to other ports and  may, in so doing, be capable of affecting trade between Member States. (52) The effect on the supply of carrier haulage services described in the preceding paragraphs is  likely to have repercussions on the supply of services ancillary to the supply of maritime  transport and carrier haulage services. Such services include port services and stevedoring  services. The effect on these services will principally be brought about by the alteration in the  flow of transport services between Member States. (53) The Commission thus considers that the agreement affects trade between Member States in  relation to the supply of carrier haulage services and the supply of services ancillary to the  supply of carrier haulage services. This effect is likely to be appreciable in view of the very  large number of containers involved. (54) An agreement such as the agreement of the members of the FEFC with respect to prices for  inland transport, which has an effect on the cost of exporting to other countries goods produced  within the Community, may affect the trade in those goods within the Community. This effect arises  from the fact that manufacturers seek to find alternative markets to which the cost of transporting  their goods is lower. Such alternative markets include the manufacturer's domestic market as well  as other Community countries (2). (55) The Commission therefore considers that the price fixing activities of the members of the FEFC  relating to inland transport also has an effect on trade in goods between Member States. II. Appropriate procedural regulation (56) The FEFC has argued that all its price fixing  activities, including those relating to inland transport services, are covered by Article 3 of  Regulation (EEC) No 4056/86, which grants a group exemption to liner conferences. For the reasons  set out in this Decision, the Commission does not consider that Regulation (EEC) No 4056/86 is the  applicable regulation for the purpose of examining the complaint and has accordingly examined the  complaint, and the practices to which it relates, under the provisions of Regulation (EEC) No  1017/68. (57) Article 1 of Regulation (EEC) No 1017/68 set out the scope of the Regulation, stating that it  applies to certain agreements, decisions and concerted practices as well as to abuses of a dominant  position 'in the field of transport by rail, road and inland waterway'. (58) Carrier haulage is the transport of containers by rail, road or inland waterway (or by a  combination of these modes of transport) by or on behalf of shipping lines in combination with  other services as part of a multimodal transport operation. Consequently, agreements, decisions and  related practices of the type described in the Regulation which concern carrier haulage fall within  the scope of the Regulation. (59) For the reasons set out below, the Commission considers that the price-fixing activities to  which this Decision relates concerning the inland transport services supplied within the territory  of the European Community to shippers in combination with other services and as part of a  multimodal transport operation for the carriage of containerized cargo between northern Europe and  the Far East by shipping lines which are members of the FEFC fall within the scope of Regulation  (EEC) No 1017/68 and not Regulation (EEC) No 4056/86. III. Regulation (EEC) No 1017/68 (i) Relationship between Regulation (EEC) No 1017/68 and  Articles 85 and 86 of the EC Treaty (60) Regulation (EEC) No 1017/68 applying rules of competition  to transport by rail, road and inland waterway was the first regulation implementing competition  rules in the transport sector. Having been adopted before the Court of Justice's express  confirmation that the competition rules contained in the Treaty apply to the transport sector (1),  Regulation (EEC) No 1017/68 reproduces with little variation the text of Articles 85 and 86 of the  Treaty (2). (61) As part of the Community's secondary legislation, Regulation (EEC) No 1017/68 cannot derogate  from the provisions of the Treaty. Consequently, Regulation (EEC) No 1017/68 must be intepreted in  the light of the case law of the Court (3), as providing the Commission with the necessary means to  enforce Articles 85 and 86 of the Treaty in inland transport, without deviating from the basic  competition rules contained in the Treaty (4). (62) An agreement which does not comply with Article 85 (3) cannot be exempted pursuant to  Regulation (EEC) No 1017/68. Articles 2, 5, 7 and 8 of Regulation (EEC) No 1017/68 should therefore  be interpreted in the same way as Articles 85 and 86, in the light of the case law, and construed  as adding nothing to them. (ii) Article 2 of Regulation (EEC) No 1017/68 (63) Article 2 of Regulation (EEC) No 1017/68 is  based on and reflects Article 85 (1) of the Treaty. It does not depart from the substantive content  of Article 85 (1), and the comments made at paragraphs 42 to 55 concerning the applicability of  Article 85 (1) apply equally to the applicability of Article 2 of Regulation (EEC) No 1017/68. (64) According to Article 2 of Regulation (EEC) No 1017/68, agreements between undertakings,  decisions by associations of undertakings and concerted practices liable to affect trade between  Member States which have as their object or effect the prevention, restriction or distortion of  competition within the common market, including, inter alia, those which directly or indirectly fix  transport rates and conditions, shall be prohibited as incompatible with the common market, no  prior decision to that effect being required. (65) For the reasons set out in paragraphs 42 to 55 and in the light of the comments made in  paragraphs 56 to 59, the agreement between the members of the FEFC with respect to the prices they  charge for carrier haulage services (the inland tariff) provided in combination with other services  as part of a multimodal transport service, is an agreement falling within the prohibition contained  in Article 2 of Regulation (EEC) No 1017/68. (iii) Article 3 of Regulation (EEC) No 1017/68 (66) The agreement between the members of the FEFC  concerning prices for carrier haulage services does not fall within the exception for technical  agreements contained in Article 3 of Regulation (EEC) No 1017/68. Article 3 of Regulation (EEC) No  1017/68 is merely declaratory and lists a number of different kinds of agreement which do not fall  within the scope of Article 85 (1) of the Treaty when their sole object and sole effect is to  achieve technical improvements or technical cooperation (1). (67) Agreements made between competitors concerning prices for the services they offer are  commercial agreements and do not have the sole object and sole effect of applying technical  improvements or of achieving technical cooperation. (68) Article 3 (1) (c) refers exclusively to 'successive, complementary, substitute or combined  transport operations' between inland modes, and not between inland transport and sea transport. The  scope of Regulation (EEC) No 1017/68 - 'transport by rail, road and inland waterway' - means that  the exception does not apply when the transport operations in question are not performed wholly  inland. (iv) Article 4 of Regulation (EEC) No 1017/68 (69) The exemption for groups of small and  medium-sized undertakings which is contained in Article 4 of Regulation (EEC) No 1017/68 is not  applicable for the following reasons: (70) Firstly, the members of the FEFC do not, for the most part, carry on themselves (or wish to  carry on themselves) inland transport activities. They do not therefore have the purpose described  in the first indent of Article 4 (1) of the Regulation. (71) Secondly, most of the members of the FEFC do not have the purpose described in the second  indent of Article 4 (1) of Regulation (EEC) No 1017/68 of providing inland transport services, nor  do most of them finance or acquire on a joint basis inland transport equipment or supplies. (72) Thirdly, the thresholds of Article 4 (1) are not satisfied. On one hand, some of the FEFC  members have no carrying capacity of their own, as would be necessary to fulfil this condition. On  the other hand, if hired or subcontracted capacity is to be taken into account, the joint capacity  of FEFC members would exceed the limits specified (see paragraph 33 for TEU and weight tons  transported by or on behalf of FEFC members in 1991). IV. Regulation (EEC) No 4056/86 (i) Article 3 of Regulation (EEC) No 4056/86 (73) The members  of the FEFC have argued that multimodal transport falls within the scope of application of  Regulation (EEC) No 4056/86 and that Article 3 of that Regulation (entitled 'Exemption for  agreements between carriers concerning the operation of scheduled maritime transport services')  exempts price fixing for inland transport services provided in combination with other services as  part of a multimodal transport operation. (74) The Commission does not accept this argument, for the following reasons: (75) The scope of the exemption contained in Article 3 of Regulation (EEC) No 4056/86 cannot be  wider than the scope of Regulation (EEC) No 4056/86 itself. Article 1 (2) of the Regulation  provides that: 'it shall apply only to international maritime transport services from or to one or more Community  ports' (emphasis added). (76) It is clear from this wording that inland transport, including the inland leg of a multimodal  transport service, does not fall within the scope of application of the Regulation and cannot  therefore be covered by the group exemption contained in Article 3. (77) In any event, the group exemption contained in Article 3 is restricted to port-to-port  operations, as shown by the reference to maritime transport in its title: 'Exemption for agreements  between carriers concerning the operation of scheduled maritime transport services' (1). (78) This conclusion also follows from the wording of the 11th recital of Regulation (EEC) No  4056/86, which states that: 'whereas in this respect users must at all times be in a position to acquaint themselves with the  rates and conditions of carriage applied by members of the conference since in the case of inland  transports organized by carriers the latter continue to be subject to Regulation (EEC) No 1017/68  (2) (emphasis added). (79) At the oral hearing in this case, it was suggested by Counsel for the FEFC that the 11th  recital of Regulation (EEC) No 4056/86 could have been intended to address the question whether  conferences which acted collectively as buyers of inland transport services were covered by the  group exemption, by making it clear that such activities fall within the scope of Regulation (EEC)  No 1017/86. (80) The recital could not override the clear wording of Article 1 (2) of the Regulation. In  addition, this interpretation of the recital could not be accepted. It does not make sense to  suggest that shippers must 'be in a position to acquaint themselves with the rates and conditions  of carriage applied by members of the conference' because those shipping lines may be acting as a  cartel in the purchase of inland transport services. (81) On the contrary, Article 5 (4) of Regulation (EEC) No 4056/86 is to be interpreted as imposing  a formal requirement on the members of the conference to make available their terms and conditions,  including their terms for carrier haulage, for the purpose of transparency in view of the fact that  the price charged by individual shipping lines for inland transport services is not permitted to be  a conference set price. Such prices would not therefore be apparent from the conference tariff. (82) Moreover, there is nothing in Regulation (EEC) No 4056/86 which suggests that conferences  which collectively negotiated the purchase of inland transport services would be covered by the  group exemption. The wording of Article 3 of the Regulation is quite clear in this respect: the  'fixing of rates and conditions of carriage' can only refer to the setting of a selling price and  not to the negotiation of a buying price in another kind of transport. (83) These conclusions are fully supported by the fact that at the time of the consultations  leading to the adoption of Regulation (EEC) No 4056/86, the European Parliament proposed the  addition of the following words to Article 3 of the draft regulation proposed by the Commission: 'the aforesaid exemption shall also apply to "intermodal transport" (i.e. maritime transport  including transport to and from ports)' (3). (84) This proposed amendment was not adopted by the Council, indicating that it was the intention  of the Council that price fixing agreements for inland transport services should not be covered by  the group exemption contained in Article 3 of Council Regulation (EEC) No 4056/86. (85) Provided that they satisfy the conditions set out in Article 5 of Regulation (EEC) No 1017/68  (that is to say, the four conditions of Article 85 (3)), the parties to such arrangements may,  however, be granted individual exemption by the Commission pursuant to Article 11 (4) or Article 12  of Regulation (EEC) No 1017/68. (ii) Article 5 of Regulation (EEC) No 4056/86 (86) An argument has been put forward by the FEFC  to the effect that Article 5 (3) and (4) of Regulation (EEC) No 4056/86 contains indications that  multimodal transport organized by liner conferences falls within the scope of Regulation (EEC) No  4056/86 and, by extension, within the scope of the group exemption contained in Article 3. (87) This argument is not well-founded and arises from a misunderstanding on the part of the FEFC  as to the nature of the obligations contained in Article 5 (3) and 5 (4). Those two provisions  should not be interpreted as referring to a conference tariff but to the terms offered by  individual shipping lines. They should not be interpreted as implying that price fixing for inland  transport services supplied in combination with other services as part of a multimodal transport  service is permitted pursuant to Article 3 of the Regulation. Those provisions simply contain  express obligations on individual shipping lines which wish to have the benefit of the group  exemption: they must allow merchant haulage, and they must publish their individual terms and  conditions for carrier haulage. (88) Article 5 therefore contains obligations which, as the heading of Article 5 and the 11th  recital of the Regulation make clear, are obligations attached to the group exemption. It does not  contain any express or implied extension to the group exemption contained in Article 3. (iii) Article 2 of Regulation (EEC) No 4056/86 (89) The FEFC has also argued that a statement  made by the Commission and noted in the minutes of the Council at the time of the adoption of  Regulation (EEC) No 4056/86 (1) leads to the conclusion that price fixing for multimodal transport  falls within the scope of Regulation (EEC) No 4056/86. Once again the FEFC has confused the  question of the group exemption for liner conferences with a statement concerning the application  of the Community's competition rules to individual shipping lines. (90) The statement of the Commission expressly refers to the technical exceptions pursuant to  Article 2 of Regulation (EEC) No 4056/86 and Article 3 of Regulation (EEC) No 1017/68. The  statement, therefore, does not refer to the question of the group exemption, but conforms that both  regulations apply in cases of multimodal sea/land operations; Regulation (EEC) No 4056/86 to the  maritime segment and Regulation (EEC) No 1017/68 to the inland segment. (91) Moreover, the statement relates only to agreements between individual sea carriers and  individual inland carriers. This is because collective price fixing agreements with competitors for  inland or for sea rates are commercially restrictive arrangements and do not have as their sole  object and sole effect the achievement of technical improvements or technical cooperation within  the meaning of Article 3 (1) of Regulation (EEC) No 1017/68 and Article 2 (1) of Regulation (EEC)  No 4056/86. Since such agreements do, as a general rule, restrict competition, it follows, inter  alia from the seventh recital of Regulation (EEC) No 4056/86, that they do not fall within the  exception for technical agreements. V. Possibility of individual exemption (92) No application for individual exemption has been made  in respect of price fixing by the members of the FEFC for carrier haulage services supplied in  combination with other services as part of a multimodal transport service. However, in view of the  Commission's obligation pursuant to Article 11 (4) of Regulation (EEC) No 1017/68 to issue a  decision applying Article 5 of the Regulation where, whether acting on a complaint received or on  its own initiative, it concludes that an agreement, decision or concerted practice satisfies the  provisions both of Article 2 and Article 5 of the Regulation, it is necessary to assess whether the  conditions of Article 5 are met in the present case. (93) The Commission has set out at paragraphs 63 to 65 its reasons for considering Article 2 of  Regulation (EEC) No 1017/68 to be applicable in the present case and sets out below its assessment  as to the applicability of Article 5 of the Regulation. (94) In carrying out this assessment, the Commission has had to distinguish between the arguments  of the members of the FEFC as to: - the merits of multimodal transport generally, - the necessity of conference inland rate fixing for the provision of multimodal transport  services, and- the necessity of conference inland rate fixing for the preservation of the  conference system. (95) The members of the FEFC have submitted extensive arguments on the merits of multimodal  transport and the benefits which flow from multimodal transport; the Commission does not, however,  dispute those benefits (1). This Decision is concerned with price fixing, and the Commission has  therefore considered only the second and third of these main themes of the FEFC regarding the  possibility of an individual exemption. (96) Article 5 of Regulation (EEC) No 1017/68 contains provisions which are modelled on and are  essentially the same as the provisions of Article 85 (3) of the Treaty (2). They are cumulative and  each must be satisfied for the Commission to be able to grant an individual exemption. (97) The equivalent provision in Article 5 of Regulation (EEC) No 1017/68 to the first and second  conditions of Article 85 (3) of the Treaty (3), provides that the prohibition in Article 2 of the  Regulation may be declared inapplicable by the Commission if the agreement, decision or concerted  practice in question: 'contributes towards: - improving the quality of transport services, or- promoting greater continuity and stability in  the satisfaction of transport needs on markets where supply and demand are subject to considerable  temporal fluctuation, or- increasing the productivity of undertakings, or- furthering technical  or economic progresses, and at the same time takes fair account of the interests of transport users. . .'(98) The third  and fourth conditions of Article 85 (3) are to all intents and purposes reproduced in the second  part of Article 5 of Regulation (EEC) No 1017/68. (99) For the following reasons, the Commission does not consider that the price fixing practices of  the FEFC with regard to inland transport fulfill the conditions set out in the first part of  Article 5 of Regulation (EEC) No 1017/68 since they do not contribute to any of the objectives  described in relation either to the provision of land transport services or in relation to the  provision of maritime transport services. Furthermore, even if they did contribute to any of those  objectives, the Commission does not consider that the conditions set out in the second part of  Article 5 would be fulfilled since the practices in question involve restrictions of competition  which would not be indispensable to the attainment of any of those objectives. (a) Improvement in the quality of transport services (100) As emphasized at paragraph 94, it is  necessary to distinguish between the merits and benefits of multimodal transport generally and the  contribution which price fixing by the members of the FEFC in respect of carrier haulage services  supplied as part of a multimodal transport service is alleged to make to improving the quality of  transport services. An assessment as to the applicability of Article 5 of Regulation (EEC) No  1017/68 concerns the latter. (101) There is no evidence that the charging of a collectively agreed price for the provision of  the carrier haulage services contributes to improving the quality of inland transport services. In  this respect, it is important to note that, as was discussed at paragraph 19, the members of the  FEFC do not, on the whole, undertake the inland carriage themselves but subcontract this task to  inland carriers. (102) Further, although the price for carrier haulage is established within the forum of the FEFC,  the individual members negotiate with inland carriers on an individual basis. Improvements to the  quality of the service in response to demand from shippers are not brought about by the  price-fixing activities of the conference but by negotiations between individual shippers and  individual lines. (103) Nor has it not been shown that price fixing by the members of the FEFC in respect of carrier  haulage services contributes to improving the quality of the maritime transport services provided  by the members of the FEFC. (b) Promotion of continuity and stability in markets with considerable temporal fluctuation (104)  The question of stability in the market for containerized liner shipping services is discussed at  paragraphs 123 to 137. (105) No evidence has been supplied by the members of the FEFC to show that the market in which  carrier haulage services are supplied is a market where supply and demand are subject to  considerable temporal fluctuation. Even if the market in question could be so categorized, it has  not been shown that the collective fixing of rates for inland transport by members of the FEFC  would contribute to continuity and stability in that market. (c) Increase in the productivity of undertakings (106) No evidence has been supplied by the  members of the FEFC to show that conference price-fixing for carrier haulage has led or is likely  to lead to increases in productivity of the undertakings concerned. Once again, it is important to  distinguish between the provision of multimodal transport services and price fixing in respect of  the inland transport element of those services. (107) So far as the actual providers of the inland transport services are concerned, price fixing  by the FEFC has no direct bearing on the service they provide or the way in which they are  provided, since they sell their services to members of the FEFC at prevailing market rates and not  at the conference set price. So far as the members of the FEFC are concerned, they are not, on the  whole, engaged in inland haulage themselves and the price-fixing agreement as to carrier haulage  does not therefore directly affect any service which they actually provide themselves. (108) Nor has it not been shown that price fixing by the members of the FEFC in respect of carrier  haulage services contribues to increasing the productivity of the members of the FEFC with regard  to the maritime transport services they provide. (d) Furthering technical or economic progress (109) No evidence has been furnished by the members  of the FEFC to show that price fixing for carrier haulage contributes to furthering technical or  economic progress, either in the provision of inland transport services or in the provision of  multimodal transport services. (110) The FEFC lines have argued that price fixing for carrier haulage permits them to invest in  those elements of a through transport service which they undertake themselves (logistics, tracking  etc. - see paragraph 19) because of the increased certainty this creates with regard to a return on  the investments concerned. (111) This argument is one which could be made for any price-fixing agreement. However, it is  unsound. It is possible that rather than encouraging the introduction of new technology, the  restrictions on competition resulting from the price-fixing activities of the members of the FEFC  will discourage new investment by reducing the competitive advantages which would otherwise accrue  to those companies which exploited their investments more successfully. (112) This situation arises from the fact that the reduction or elimination of competition between  the members of the FEFC with regard to prices is likely to prevent shipping lines from passing on  cost savings resulting from new equipment and new technologies to their customers. Equally the fact  that more efficient lines are less likely to benefit from their efficiencies and are less likely to  increase market share as a result means that efficient lines are less likely to invest in new  technologies. (113) Accordingly, it has not been shown that the price-fixing activities of the members of the  FEFC with regard to carrier haulage contribute to furthering technical or economic progress. (114) Nor has it not been shown that price fixing by the members of the FEFC in respect of carrier  haulage services contributes to furthering technical or economic progress with regard to the  maritime transport services provided by those members. (e) Fair account of the interests of users (115) The Commission is of the opinion that the FEFC  agreement does not take fair account of the interests of users (1) in so far as it concerns price  fixing for inland haulage. Agreement by the members of the FEFC of the price for carrier haulage  services, without more, does not take adequate account of the interests of shippers and other  transport users. It simply serves to ensure that prices are maintained at levels higher than they  would otherwise be. This is directly contrary to the interests of users. (116) Where individual carries are able to reduce their costs by organizing their container fleets  more efficiently than other carriers, conference price fixing for carrier haulage services prevents  the more efficient lines from passing on cost savings. This again is contrary to the interests of  users. (117) In considering whether the practices in question take fair account of the interests of users,  the Commission has taken note of the complaints made by bodies representing the interests of the  users of the inland transport services supplied by the members of the FEFC: the German Shipper's  Council; supported by the British Shippers' Council, the French Shippers' Council (CNUT) and by the  main representative body for shippers in Europe, the European Shippers' Councils. Freight  forwarders have through their representative organization CLECAT (Comité de Liaison Européen des  Commissionnaires et Auxiliaires de Transport) as well as the UIRR (Union Internationale des  Sociétés de Transport Combiné Rail-Route) have expressed concern about distortions of competition  in inland transport which are brought about by the practices to which this Decision is addressed. (118) In the present case, the reservation of a fair share of the benefit to consumers implies the  maintenance of a high level of competition in the supply of inland transport services to shippers:  the Commission should seek to ensure that shippers have the widest choice of quality and price when  buying inland transport services. In practice, the reservation to consumers of a fair share of the  benefits of door-to-door transport would be more easily achieved in the absence of any price-fixing  agreement such as the FEFC. (f) Indispensability of the restrictions (119) As explained at paragraph 94, it is necessary to  consider whether the restrictions of competition resulting from the price-fixing activities of the  FEFC with regard to carrier haulage are indispensable: - for the provision of multimodal transport services, or- for the preservation of the liner  conference system of rate fixing for maritime transport. (120) In respect of the first of these objectives, it must be stressed that the members of the FEFC  do not, for the most part, provide inland transport services themselves. Nor does the FEFC  undertake any inland transport activities other than providing the forum for fixing the prices of  carrier haulage services provided in combination with other services as part of a multimodal  transport service by members of the FEFC. (121) Collective price fixing for carrier haulage is not essential for the provision of these  services, as is demonstrated by the fact that many independent carriers and freight forwarders  offer equivalent or similar services outside the framework of the FEFC, or any other conference,  and without fixing prices in common with any other line for the provision of carrier haulage  services. (122) Freight forwarders are in direct competition with shipping lines for the provision of  transport services and both of them act as intermediaries between actual providers and buyers of  inland transport services. Moreover, freight forwarders have provided door-to-door services to  shippers for as long as liner shipping companies, if not longer. Neither freight forwarders nor  railway companies enjoy any exemption for price fixing in relation to their activities. (123) So far as the second objective is concerned, the FEFC has argued that the stabilizing role of  liner conferences (1) would be endangered in the absence of collective inland rate-fixing by liner  conferences. The FEFC has contended that if their members set inland rates on an individual basis  rather than collectively, they would be tempted to undermine the conference-set maritime rates by  competing on price with regard to inland rates. This argument has been supported by the Gilman and  Graham Report which states, inter alia, that: 'in an integrated intermodal environment, conferences can not perform their functions of  stabilizing rates or promoting efficiency and rationalization unless their rate making authority  extends to the inland sector.' (2)(124) Gilman and Graham argue that the primary cause for loss of  maritime freight rate stability lies in the relationship between sea freight and inland transport  revenues. 'By competing for and securing the inland move a carrier also secures the sea freight. It is clear  that, (so long as they had any spare slots on their vessels) it would pay conference carriers to  absorb a considerable amount of the inland transport cost in order to obtain cargo.' (1)(125)  Gilman and Graham argue that the perishable nature of transport capacity contributes to this  tendency towards price instability. Pointing to the fact that under the auspices of the conference  system there has been considerable network rationalization (2), they also argue that competition  might be extended 'across broad hinterlands using the inland modes' (paragraph 4.19). (126) For the following reasons, the Commission does not accept that these arguments demonstrate  the indispensability of price fixing for carrier haulage services for the preservation of the  maritime rate stability achieved by conferences such as the FEFC. It must be noted that to satisfy  the test of 'indispensability', it is incumbent on the parties to demonstrate that it would not be  possible to achieve their objectives in a manner which was less restrictive of competition. (127) A conference brings stability to the trades it affects by fixing a uniform tariff which  serves as a reference point for the market. Prices set in this way are likely to remain unchanged  for a longer period of time than if they are set by individual lines. This reduction in the price  fluctuations which would be expected in a normally competitive market may benefit shippers by  reducing uncertainty as to future trading conditions.(128) The stability envisaged by Regulation (EEC) No 4056/86 has the consequent effect of assuring  shippers of reliable services. Liner services are by their nature regular in the sense of following  an evenly spread timetable. Reliable services are those which are of a reasonable quality, such  that the shippers' goods come to no harm, and at the same price irrespective of which day and which  line is chosen to carry the cargo. Reliability in the supply of transport services is the  maintenance over time of a scheduled service, providing shippers with the guarantee of a service  suited to their needs. (129) The fact that the cartelization of one part of the activities of shipping lines is judged to  be compatible with the competition rules is not in itself a justification for the exemption of all  the activities of those companies. Such an argument would be tantamount to arguing that members of  a liner conference should be permitted to fix prices in respect of any service which they chose to  provide in combination with maritime transport services, lest price competition for such further  services undermined the conference tariff for maritime transport. (130) It would not be compatible with the Community's objective of achieving a system ensuring that  competition in the internal market is not distorted if it were accepted that stability in respect  of one revenue-producing activity could, under the Community's competition rules, justify an  exemption in respect of price fixing for all other revenue-producing activities provided in  combination with the exempted activity. (131) Furthermore, it has not been shown that price fixing for carrier haulage is indispensable for  the preservation of the 'stabilizing role' of conferences. Although the parties have argued at  length that all activities undertaken by conference members must be subject to price fixing, they  have failed to show that this is essential in order to preserve the rate discipline on the maritime  leg from which the stability in question arises and that there is no less restrictive way of doing  so.(132) The FEFC is no exception to the general rule that all cartels are susceptible to 'cheating'  or secret discounting at times when members of the cartel have spare capacity (3). This was  conceded by Counsel for the FEFC at the oral hearing, who acknowledged (4) the existence of both  authorized rebating such as service contracts (5) and loyalty arrangements (6) as well as  unauthorized rebating. (133) This is a perfectly normal consequence of cartel behaviour. The members of the cartel seek  not only to maximize profits by agreeing prices between themselves but also to maximize revenues by  gainig market share from one another. Such behaviour normally results in a degree of instability  even in the most disciplined cartel. Cartels also suffer the inevitable instability due to the fact  that it always pays to be the one company operating outside the cartel. (134) The FEFC therefore already faces a degree of instability in respect of both its maritime and  inland tariffs, brought about by competitive discounting on the part of its members. It is not  necessary to have absolute discipline in order to maintain the stability which the conference  system brings about, that is to say, reliable services at prices which do not fluctuate greatly in  the short-term. In particular, competitive discounting does not upset the stability envisaged by  Regulation (EEC) No 4056/86, since it has not been shown that it leads to the absence of reliable  services or of stable prices over a period of time. (135) In this context, it is important to note that certain activities are undertaken not on the  basis of an agreed conference price but on the much less restrictive basis of an agreement not to  charge below cost (see paragraph 40). No evidence has been supplied by the parties that this system  undermines stability to an excessive degree, or indeed at all. (136) The Commission recognizes that, in the absence of collective price fixing for carrier haulage  services, the members of the FEFC might charge shippers rates which are below their costs of buying  in such services, the effect of which would be similar to offering a discount off the conference  tariff for the maritime transport. There is a risk that this would undermine the stability brought  about by the FEFC to a greater extent than it is already undermined by other means of discounting  from the FEFC maritime transport tariff and by competition from shipping lines which are not  members of the FEFC. (137) However, even if it is accepted that permitting the FEFC to fix prices in respect of carrier  haulage services offered by its members does contribute to the creation of stability, it has not  been established that measures less restrictive of competition would not have sufficient impact to  attain that objective. Measures which might be taken to ensure the stability of the conference  maritime tariff are listed in Article 3 of Regulation (EEC) No 4056/86 and include the allocation  of cargo or revenue amongst the members of a conference. (138) In conclusion, price fixing for carrier haulage by the members of the FEFC does not appear  indispensable to the attainment of the objectives claimed. (139) This conclusion applies only to the existing practices of the FEFC in relation to price  fixing for inland transport. In particular, this Decision does not consider whether and to what  extent other kinds of agreement relating to multimodal transport might fulfill the conditions of  Article 85 (3) (1). (g) Elimination of competition for a substantial part of the market (140) Since it has been  established that the first three conditions of Article 85 (3) of the Treaty and of Article 5 of  Regulation (EEC) No 1017/68 are not satisfied in the present case, it is not necessary to consider  whether the parties are afforded the possibility of eliminating compoetition in respect of a  substantial part of the services in question. (h) Conclusions (141) The above considerations lead to the conclusion that while the development  of multimodal transport may constitute a means of improving transport services, collective price  fixing for carrier haulage services does not. Furthermore, transport users do not obtain a fair  share of the benefits of price fixing for carrier haulage services and the restrictions of  competition are not indispensable. Accordingly, the conditions of Article 85 (3) and of Article 5  of Regulation (EEC) No 1017/68 are not fulfilled. (142) Moreover, at a time when efforts are being made to liberalize and deregulate the provision of  European inland transport services, it would be incoherent and would give rise to inconsistencies  if conferences were granted an exemption to fix prices for some inland transport services but their  competitors providing equivalent services were not so permitted (1). VI. Article 22 (2) of Regulation (EEC) No 1017/68 (143) According to Article 22 (2) of Regulation  (EEC) No 1017/68, the Commission may impose on undertakings fines from ECU 1 000 to ECU 1 million,  or a sum in excess thereof but not exceeding 10 % of the turnover in the preceding business year of  each of the undertakings participating in the infringement, where either intentionally or  negligently they commit an infringement of Article 2 or Article 8 of Regulation (EEC) No 1017/68.  In fixing the amount of the fine the Commission will have regard both to the gravity and to the  duration of the infringement. (i) Assessment as to gravity and duration (144) In considering the gravity and duration of the  infringement in this case, the Commission has taken into account the following criteria: (a) the nature of the infringement; (b) the intentions of the parties; (c) the failure of the parties to terminate the infringement; (d) the nature and value of the services in question; (e) the degree of each party's involvement in the infringement; and(f) the duration of the  infringement. (a) The nature of the infringement (145) The Commission considers that, in general, practices  aimed at restricting price competition are a matter of indisputable gravity (2). This follows both  from the fact that price fixing is specifically referred to in Article 85 (1) and from the  established case-law of the Court of Justice (3). The infringement in question eliminates price  competition between the members of the FEFC with respect to the inland transport services they  provide. (b) Intentions of the parties (146) The Court of Justice has ruled that: 'it is not necessary for an undertaking to have been aware that it was infringing the competition  rules in the Treaty for an infringement to be regarded as having been commited intentionally; it is  sufficient that it could not have been unaware that the contested conduct had as its object the  restriction of competition' (4). (147) The Commission considers that the purpose of the members of the FEFC was to eliminate price  competition between themselves with respect to the inland transport services they provide.  Accordingly, they could not have been unaware that their price-fixing activities in relation to  inland transport services had as their object the restriction of competition. (c) The failure of the parties to terminate the infringement (148) The members of the FEFC have  been aware at least since the complaint submitted by the BDI/DSVK to the Commission was sent to  them on 23 June 1989 that there was a possibility that the practices dealt with in this Decision  constituted infringements of Article 85 (1) of the Treaty and Article 2 of Regulation (EEC) No  1017/68 and that they did not fall within the scope of the group exemption for liner conferences  contained in Article 3 of Regulation (EEC) No 4056/86. (149) Despite this complaint and in spite of repeated preliminary advice from the Commission  (including a letter from the Member of the Commission then responsible for competition policy to  the Chairman of the FEFC in June 1990) that the practices in question fell within the scope of  Article 85 (1) and did not benefit from any exemption pursuant to Article 85 (3), the parties have  maintained them in full force and effect. At no stage, even subsequent to the notification of the  statement of objections in December 1992, have the parties formally notified their practices to the  Commission for individual exemption. (d) The nature and value of the services in question (150) As indicated at paragraphs 34 to 37,  in 1992 the cost of supplying inland transport services for 10 of the largest members of the FEFC  was some ECU 477 million. This amount is probably representative, in real terms, of the cost of  supplying inland transport services by those 10 lines for years both before and since 1992. The  annual value of the services in question is therefore considerable and represents a significant  cost for the Community's industry. (e) The degree of each party's involvement in the infringement (151) With the exception of Wilh.  Wilhelmsen, there is no indication that any individual line had a greater or lesser involvement in  the collective decision to fix prices for the services with which this Decision is concerned. Wilh.  Wilhelmsen is not an active member of the FEFC and does not operate vessels on the routes in  question. (f) The duration of the infringement (152) As indicated at paragraphs 39, 40 and 41, price fixing  for inland transport services by the FEFC commenced in a general manner around 1971 and has been in  continuous effect since them. The current FEFC tariff for carrier haulage which is contained in  NT90 was introduced with effect from 1 January 1990. Regulation (EEC) No 1017/68, the regulation  applicable to the infringement in question, came into force on 1 July 1968. (ii) Conclusions as to the gravity and duration of the infringements (153) The Commission  considers that the infringement in question is a very serious infringement of Community competition  law and that it is likely to have had a significant economic impact. Furthermore, the infringement  has been taking place in a general manner since 1971 and certainly since the submission of the  DSVK's complaint to the Commission in April 1989. (154) Although the parties have argued that the practices in question fall within the scope of the  group exemption for liner conference price-fixing agreements laid down in Regulation (EEC) No  4056/86, the scope of that exemption could not possibly be wider than the scope of the Regulation  itself. Article 1 (2) of the Regulation provides that: 'It shall apply only to international maritime transport services from or to one or more Community  ports'. (155) In construing the provisions of Regulation (EEC) No 4056/86, it is necessary to bear in mind  the general principle of Community law that derogations, such as group exemptions, are not to be  construed broadly (see footnote 20). (156) Furthermore, the Commission's Report to the Council concerning the application of the  Community's competition rules to liner shipping in June 1994 contained very clear indications of  the Commission's conclusions concerning multimodal rate fixing in general. Representatives of the  FEFC wrote to the Commission with its preliminary views on the Report on 12 August 1994. (157) The Commission considers that the members of the FEFC could not have been unaware that the  agreement fell within the scope of Article 85 (1) of the Treaty and that they should have been  aware that it did not fall within the scope of the group exemption for liner conferences or any  other exemption. The Commission considers that fines are appropriate in this case. (158) Notwithstanding these conclusions as to the gravity and duration of the infringement, the  Commission has taken into account the facts that the existence of the practices in question was  widely known and that, for a variety of reasons, this Decision on those practices has taken longer  to adopt than might otherwise have been the case. The Commission has also considered the following  circumstances: (i) the Commission's orientations with respect to multimodal price fixing by liner shipping  conferences were not widely known until the submission of its Report to the Council referred to  above; (ii) the development of the Commission's orientations in this regard has taken some time to  achieve, with the result that the prosecution of this case has taken longer than would normally  have been the case and the members of the FEFC should not be penalized in respect of this  additional period; and(iii) the fact that the present Decision is the first decision applying the  provisions of Regulation (EEC) No 1017/68 to the members of a liner shipping conference. (159) In view of the above, the Commission considers that the level of fines in this case should be  set at a symbolic level to make clear the existence of the infringement and the need for future  compliance with the Community's competition rules by the undertakings in question and by other  undertakings which may be engaged in equivalent practices. No fine should be imposed on Wilh.  Wlhelmsen having regard to its non-involvement in the offence (see paragraph 151). HAS ADOPTED THIS DECISION: Article 1The members of the Far Eastern Freight Conference listed in the Annex  have infringed the provisions of Article 85 of the EC Treaty and Article 2 of Regulation (EEC) No  1017/68 by agreeing prices for inland transport services supplied within the territory of the  European Community to shippers in combination with other services as part of a multimodal transport  operation for the carriage of containerized cargo between northern Europe and the Far East. Article 2The conditions of Article 5 of Regulation (EEC) No 1017/68 are not fulfilled. Article 3The members of the Far Eastern Freight Conference listed in the Annex are hereby  required to put an end to the infringement referred to in Article 1. Article 4The undertakings to whom this Decision is addressed are hereby required to refrain in  future from any agreement or concerted practice having the same or a similar object or effect to  the agreement referred to in Article 1. Article 5Fines as set out below are hereby imposed on the undertakings to whom this Decision is  addressed in respect of the infringement of the provisions of Article 85 of the EC Treaty and  Article 2 of Regulation (EEC) No 1017/68 referred to in Article 1. Compagnie Générale Maritime ECU 10 000Hapag-Lloyd Aktiengesellschaft ECU 10 000Croatia Line ECU  10 000Kawasaki Kisen Kaisha Limited ECU 10 000Lloyd Triestino di Navigazione SpA ECU 10 000AP  Moeller-Maersk Line ECU 10 000Malaysian International Shipping Corporation Berhad ECU 10 000Mitsui  OSK Lines Ltd ECU 10 000Nedlloyd Lijnen BV ECU 10 000Neptune Orient Lines Ltd ECU 10 000Nippon  Yusen Kabushiki Kaisha ECU 10 000Orient Overseas Container Line ECU 10 000P & O Containers Ltd  ECU 10 000Article 6The fines imposed in Article 5 shall be paid, in ecus, within three months  of the date of notification of this Decision, into bank account No 310-0933000-43 of the Commission  of the European Communities, Banque Bruxelles Lambert, Agence Européenne, Rond-Point Schumann 5,  B-1040 Brussels. After expiry of that period, interest shall be automatically payable on the fine at the rate  charged by the European Monetary Institute for transactions in ecus on the first working day of the  month in which this Decision is adopted, plus 3,5 percentage points, namely 9,25 %. Article 7This Decision is addressed to the undertakings listed in the Annex. This Decision shall be enforceable pursuant to Article 192 of the EC Treaty. Done at Brussels, 21 December 1994. For the CommissionKarel VAN MIERTMember of the Commission(1) OJ No L 175,  23. 7. 1968, p. 1 (Special Edition 1968 I, p. 302). (2) OJ No L 378, 31. 12. 1986, p. 4. (3) OJ No L 209, 21. 8. 1969, p. 11. (1) The Case for Conference Rate Making Authority in the Inland Sector, Report prepared for the  FEFC by Professor S. Gilman and M. Graham, July 1990. (1) Reply to the Statement of Objections, 31. 3. 1993, p. 104. (1) Reply to the Statement of Objections, pp. 38 and 105. (2) CGM, Hapag-Lloyd, K Line, Lloyd-Triestino, Maersk, MISC, Mitsui, NYK, OOCL, P& O. (1) Far Eastern Freight Conference, Europe/Japan & Japan/Europe Freight Conferences, Hong  Kong/Europe Freight Conference, Philippines/Europe Conference, Sabah, Brunei & Sarawak Freight  Conference. (2) The scope of these services is described in paragraph 6 of this Decision. (3) ICI-Dyestuffs, Case 48/69, [1972] ECR, p. 619, paragraph 115. (4) Grundig/Consten, Joined Cases 56 and 58/64, [1966] ECR p. 299, paragraph 342. Zinc Producer  Group, Commission Decision 84/405/EEC (OJ No L 220, 17. 8. 1984, p. 27): 'In any case, for Article  85 (1) to be applicable, it is sufficient for there to have been the intention to restrict  competition; it is not necessary for the intention to have been carried out, in full or only in  part, that is to say, for the restriction of competition to have been put into effect.' (5) Grundig/Consten, cited above, p. 341. (1) See sixth recital of Regulation (EEC) No 4056/86 describing the effect which restrictive  practices concerning international maritime transport may have on Community ports. (2) Case 136/86, BNIC v. Aubert, [1987] ECR, p. 4789, paragraph 18. Similarly, the Court ruled  pursuant to Article 92 in Joined Cases 67, 68 and 70/85, Kwekerij Gebroeders Van der Kooy BV and  Others v. Commission (Dutch Natural Gas Prices I), [1988] ECR, p. 219, at paragraph 59, that  subsidization of the price of natural gas to Dutch glasshouse crop producers by 5,5 % affected  trade between Member States because of the importance of energy costs (25 to 30 % of the selling  price) and of the market share (65 %) and the exports (91 %) of the firm receiving the State aid. (1) French Seamen's Case No 167/73, [1974] ECR, p. 359, paragraph 32; Nouvelles Frontières, Cases,  No 209-213/84, [1986], ECR, p. 1425, paragraphs 42 to 45; Ahmed Saeed, Case No 66/86, [1989] ECR,  p. 803, paragraphs 32 to 33. (2) Tariff Structures in the Combined Transport of Goods, Commission Decision 93/174/EEC of 24  February 1993, OJ No L 73, 26. 3. 1993, p. 38, paragraph 19. (3) Ahmed Saeed, see footnote 15, paragraph 12 in relation to Regulation (EEC) No 3975/87. (4) Ahmed Saeed, see footnote 15, paragraph 25. (1) HOV SVZ/MCN, Commission Decision 94/210/EC of 29 March 1994, OJ No L 104, 23. 4. 1994, p. 34,  paragraph 91. The English language version of Article 3 of Regulation (EEC) No 1017/68 has omitted  the word 'sole', which is included in the original language versions of Regulation (EEC) No 1017/68  as well as in Regulations (EEC) No 4056/86 (Article 2) and (EEC) No 3975/87 (Article 2). (1) See Case T-9/92, Automobiles Peugeot SA, Judgment of 22 April 1993, not yet reported, paragraph  37. '. . .having regard to the general principle of the prohibition of agreements inhibiting  competition contained in Article 85 (1) of the Treaty, derogating provisions in a regulation  granting exemption by category could not be interpreted broadly. . .' See also the opinion of  Advocate-General Van Gerven in Case C-234/89, Delimitis, [1991] ECR I, p. 955, point 5. '. . .when  an agreement is not covered by the terms of the block exemption regulation, that block exemption,  in itself a derogation from the prohibition pursuant to Article 85 (1), and therefore to be  strictly interpreted, may on no account be extended.' (2) The English language version of Regulation (EEC) No 4056/86 incorrectly uses the word  'shippers' instead of the correct word 'carriers'. That this is an error is clear for at least two  reasons: (i) the recital does not make sense in the English language version; and(ii) the other language  versions of the Regulation are unequivocal in referring to 'carriers' (e.g. 'transporteurs  maritimes', 'trasportatori marittimi', 'Seeverkehrsunternehmen'). (3) See amendments to the proposal for a Council Regulation laying down detailed rules for the  application of Articles 85 and 86 of the Treaty to maritime transport, OJ No C 255, 13. 10. 1986,  p. 176, paragraph 177. (1) 'The Commission states that multimodal sea/land transport operations are subject to the rules  of competition adopted for land transport and to those laid down for sea transport. In practice,  non-application of Article 85 (1) will be the rule as regards the organization and execution of  successive or supplementary multimodal sea/land transport operations and the fixing or application  of inclusive rates for such transport operations, since both Article 2 of this Regulation  (Regulation (EEC) No 4056/86) and Article 3 of Regulation (EEC) No 1017/68 state that the  prohibition laid down by Article 85 (1) of the Treaty shall not apply to such practices'. (Council  Doc. No. 11584/86 MAR 84, Annex III, p. 5 (19. 12. 1986)). (1) See for example the Report of the Commission to the Council dated 8 June 1994 concerning the  application of the Community's competition rules to maritime transport where it is stated at  paragraph 3.1 - 'The Commission is wholly in favour of the development of multimodal transport, a  modern mode of transport that meets a specific demand from shippers, and wishes to contribute to  its development.' Doc. SEC(94) 933 final. (2) Tariff Structures, see footnote 16. (3) '. . .which contributes to improving the production or distribution of goods or to promoting  technical or economic progress, while allowing consumers a fair share of the resulting benefit. .  .' (1) Article 1 (3) (c) of Regulation (EEC) No 4056/86 refers to 'shippers, consignees and  forwarders', among others, as transport users. (1) '. . .whereas liner conferences have a stabilizing effect, assuring shippers of reliable  services;. . .' 8th recital of Regulation (EEC) No 4056/86. (2) Gilman and Graham Report, paragraph 4.30. (1) Gilman and Graham Report, paragraph 4.16. (2) That is to say, conference members have agreed between themselves to serve a limited number of  ports in the interests of rationalization. (3) 'Detecting and deterring cheating has been termed the central cartel problem, and, because  solving it is often difficult, many economists argue that price-fixing cartels are inherently  unstable.' F. M. Scherer and David Ross, Industrial Market Structure and Economic Performance  (Houghton Mifflin, 1990, p. 245). (4) See page 131 of the transcript of the oral hearing in this case. (5) Service contracts are agreements between individual shippers and individual shipping lines, or  groups of shipping lines, for the carriage of a minimum number of containers and provision of  special services at an individually negotiated price. (6) Such as those provided for in Article 5 (2) of Regulation (EEC) No 4056/86. (1) Note should be made of the Commission's statement in its Report to the Council concerning  maritime transport: it considered: 'that, in certain circumstances, specific cooperation agreements between groups of shipowners or  between shipowners and individual carriers could promote sufficient technical or economic progress  to be allowed, by individual exemption, to set uniform inland rates.'The Commission also stated in  that Report that, if appropriate, it would be prepared to consider granting individual exemptions  which also allowed: 'a provision to be included in the agreement of the conference of which the group lines (benefiting  from the individual exemption) are members stipulating that the inland rates of the tariffs. . .may  be not less than cost, thus largely avoiding any risk of destabilizing the conferences through  cross subsidization between the inland and maritime segments.' (1) See also the Report of the Commission to the Council concerning the application of the  Community's competition rules to maritime transport. (2) HOV SVZ/MCN, cited above, paragraph 259. (3) See, for example, Case 26/76, Metro v. Commission II [1977] ECR, p. 1875: 'price competition is  so important that it can never be eliminated'. (4) Case C-279/87, Tippex v. Commission [1990] ECR I, p. 261. ANNEX Compagnie Générale MaritimeQuai Galliéni, 22F-92158 Suresnes CedexHapag-Lloyd  AktiengesellschaftPostfach 102626Ballindamm 25D-20095 HamburgCroatia Line8 Riva5100  RijekaRepublic of CroatiaKawasaki Kisen Kaisha LtdHibiya Central Building2-9 Nishi-Shinbashi  1-ChomeMinato-KuTokyo 105JapanLloyd Triestino di Navigazionie SpAPassaggio S Andrea 4I-34123  TriesteAP Moeller-Maersk LineEsplanaden 50DK-1098 Koebenhavn KMalaysian International Shipping  Corporation Berhad2nd Floor Wisma MISC2 Jalan ConlayPO Box 1037150712 Kuala  LumpurMalaysiaMitsui OSK Lines Ltd1-1 Toranomon 2-ChomeMinato-KuTokyo 107JapanNedlloyd  Lijnen BVBoompjes 40NL-3011 XB RotterdamNeptune Orient Lines Ltd456 Alexandra RoadNo 06-00 NOL  BuildingSingapore 0511Republic of SingaporeNippon Yusen Kabushiki Kaisha3-2 Marunouchi  2-ChomeChiyoda-KuTokyoJapanOrient Overseas Container Line30th-31st Floor Harbour Centre25  Harbour RodWan ChaiHong KongP& O Containers LtdBeagle HouseBraham StreetUK-London E1  8EPWilh. Wilhelmsen Limited A/SOlav V's G5PO Box 1359N-0161 Oslo