Commission Regulation (EC) No 823/2000 of 19 April 2000 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) (Text with EEA relevance)
Date: 2000-04-19
Institutions: European Commission
Subjects: carriage of goods, international transport, maritime law, maritime transport, restrictive trade practice, transport regulations

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COMMISSION REGULATION (EC) No 823/2000

of 19 April 2000

on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and
concerted practices between liner shipping companies (consortia)

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EEC) No 479/92 of 25
February 1992 on the application of Article 85(3) of the Treaty
to certain categories of agreements, decisions and concerted
practices between liner shipping companies (consortia) (1), as
amended by the Act of Accession of Austria, Finland and
Sweden, and in particular Article 1 thereof,

Having published a draft of this Regulation (2),

Having consulted the Advisory Committee on Restrictive Prac-
tices and Dominant Positions in Maritime Transport,

Whereas:

(1)

(2)

(3)

agreements, decisions

Regulation (EEC) No 479/92 empowers the Commission
to apply Article 81(3) of the Treaty to certain categories
of
and concerted practices
between shipping companies (consortia) relating to the
joint operation of
services, which,
through the cooperation they bring about between the
shipping companies that are parties thereto, are liable to
restrict competition within the common market and to
affect trade between Member States and may therefore
be caught by the prohibition contained in Article 81(1)
of the Treaty.

transport

liner

The Commission has made use of
this power by
adopting Commission Regulation (EC) No 870/95 (3). In
the light of experience thus acquired so far, it is possible
to define a category of consortia which are capable of
falling within the scope Article 81(1) but which can
normally be regarded as satisfying the conditions laid
down in Article 81(3).

The Commission has taken due account of the special
features of maritime transport. Those features will also
constitute a material factor in any Commission assess-
ment of consortia not covered by this block exemption.

(1) OJ L 55, 29.2.1992, p. 3.
(2) OJ C 379, 31.12.1999, p. 13.
(3) OJ L 89, 21.4.1995, p. 7.

(5)

(6)

(7)

(8)

Consortia, as defined in this Regulation, generally help
to improve the productivity and quality of available liner
shipping services by reason of the rationalisation they
bring to the activities of member companies and
through the economies of scale they allow in the opera-
tion of vessels and utilisation of port facilities. They also
help to promote technical and economic progress by
facilitating
greater utilisation of
containers and more efficient use of vessel capacity.

and encouraging

Users of the shipping services provided by consortia
generally obtain a fair share of the benefits resulting
from the improvements in productivity and service
quality which they bring about. Those benefits may also
take the form of an improvement in the frequency of
railings and port calls, or an improvement in scheduling
as well as better quality and personalised services
through the use of more modern vessels and other
including port facilities. Users can benefit
equipment,
effectively from consortia only if
there is sufficient
competition in the trades in which the consortia operate.

Those agreements
should therefore enjoy a block
exemption, provided that they do not give the compa-
nies concerned the possibility of eliminating competition
in a substantial part of the trades in question. In order to
take account of the constant fluctuations in the maritime
transport market and the frequent changes made by the
parties to the terms of consortium agreements or to the
activities covered by the agreements, one of the objects
of this Regulation is to clarify the conditions to be met
by consortia in order to benefit from the block exemp-
tion it grants.

For the purpose of establishing and running a joint
service, an essential feature inherent in consortia is the
ability to make capacity adjustments. The non-utilisation
of a certain percentage of vessel capacity within a
consortium is not an essential feature of consortia.

The block exemption granted by this Regulation should
cover both consortia operating within a liner conference
and consortia operating outside such conferences, except
that it does not cover the joint fixing of freight rates.

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(9)

Rate-fixing activities come under 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 (1), as amended by
the Act of Accession of Austria, Finland and Sweden.
Consortium members that wish to fix rates jointly and
do not satisfy the criteria of Regulation (EFC) No 4056/
86 must apply for individual exemption.

(10)

The first of the conditions attaching to the block exemp-
tion should be that a fair share of the benefits resulting
from the improved efficiency, as well as the other bene-
fits offered by consortia, are passed on to transport
users.

(11)

This requirement of Article 81(3) should be regarded as
being met when a consortium is in one or more of the
three situations described below:

— there is effective price competition between the
members of the conference within which the consor-
tium operates as a result of independent rate action,

— there exists within the conference within which the
consortium operates a sufficient degree of effective
competition in terms of services provided between
consortium members and other conference members
that are not members of the consortium, as a result
of the fact that the conference agreement expressly
allows consortia to offer their own service arrange-
ments, e.g. the provision by the consortium. alone of
a ‘just-in-time delivery’ service or an advanced ‘elec-
tronic data interchange’ (EDI) service allowing users
to be kept informed at all times of the whereabouts
increase in the
of
frequency of sailings and calls in the service offered
by a consortium compared with that offered by the
conference,

their goods, or a significant

— consortium members are subject to effective, actual
or potential competition from non-consortium lines,
whether or not a conference operates in the trade or
trades in question.

(12)

(13)

In order to satisfy this same requirement of Article
81(3), provision should be made for a further condition
aimed at promoting individual competition as to quality
of service between consortium members as well as
between consortium members and other
shipping
companies operating in the trade or trades.

It
should be a condition that consortia and their
members do not, in respect of a given route, apply rates
and conditions of carriage which are differentiated solely
by reference to the country of origin or destination of
the goods carried and thus cause within the Community
deflections of trade that are harmful to certain ports,
shippers, carriers or providers of services ancillary to

(1) OJ L 378, 31.12.1986, p. 4.

transport, unless
economically justified.

such rates or conditions can be

The aim of the conditions should also be to prevent
consortia from imposing restrictions on competition
which are not indispensable to the attainment of the
objectives justifying the grant of the exemption. To this
end, consortium agreements should contain a provision
enabling each shipping line party to the agreement to
withdraw from the consortium provided that it gives
reasonable notice. However, provision should be made
for a longer notice period in the case of highly inte-
grated and/or high-investment consortia in order to take
account of the higher investments undertaken to set
them up and the more extensive reorganisation entailed
in the event of a member's leaving. It should also be
stipulated that, where a consortium operates with a joint
marketing structure, each member should have the right
to engage in independent marketing activities provided
that it gives reasonable notice.

Exemption must be limited to consortia which do not
have the possibility of eliminating competition in a
substantial part of the services in question.

In order to determine for the purposes of exemption
whether exemption competition exists on each market
upon which the consortium operates, account should be
taken not only of direct trade between the ports served
by a consortium but also of any competition from other
liner services sailing from ports which may be substi-
tuted for those served by the consortium and, where
appropriate, of other modes of transport.

The block exemption granted by this Regulation is there-
fore applicable only on condition that on each market
upon which the consortium operates the market share
held by a consortium does not exceed a given size.

The market share held by a consortium within a confer-
ence should be smaller in view of the fact that the
agreements is question are superimposed on an existing
restrictive agreement.

(14)

(15)

(16)

(17)

(18)

(19) However,

it

is appropriate to offer consortia which
exceed the limits laid down in this Regulation by a given
percentage but which continue to be subject to effective
competition in the trades in which they operate a
simplified procedure so that they may benefit from the
legal certainty afforded by block exemptions. Such a
procedure should also enable the Commission to carry
out effective monitoring and simplify the administrative
control of agreements.

(20) However, consortia which exceed the limit should be
able
to obtain exemption by individual decision,
provided that they satisfy the tests of Article 81(3),
regard being had to the special features of maritime
transport.

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(21)

(22)

This Regulation should apply only to agreements
concluded between the members of a consortium.
Therefore, the block exemption should not cover restric-
tive agreements concluded between, on the one hand,
consortia or one or more of their members, and, on the
other hand, other shipping companies. Nor should it
apply
agreements between different
consortia operating in the same trade or between the
members of such consortia.

to restrictive

Certain obligations should also be attached to the
exemption. In this respect, transport users should at all
times be in a position to acquaint themselves with the
conditions for the provision of the maritime transport
services jointly operated by the members of the consor-
tium. Provision should be made for real and effective
consultations between the consortia and transport users
on the activities covered by the agreements. This Regula-
tion also specifies what is meant by ‘real and effective
consultations’ and what main procedural stages are to be
followed for such consultations. Provision should be
made for such mandatory consultation, limited to the
activities of consortia as such.

(23)

Such consultations are likely to secure a more efficient
operation of maritime transport services which takes
account of users' requirements. Consequently, certain
restrictive practices which could ensue from such
consultations should be exempted.

(28) No applications under Article 12 of Regulation (EEC) No
4056/86 should need to be made in respect of agree-
ments automatically exempted by this Regulation.
However, when real doubts exist, companies should be
permitted to request the Commission to declare whether
their agreements comply with this Regulation.

(29)

(30)

This Regulation is without prejudice to the application
of Article 82 of the Treaty.

In view of the expiry of Regulation (EC) No 870/95, it is
appropriate to adopt a new Regulation renewing the
block exemption,

HAS ADOPTED THIS REGULATION:

CHAPTER I

SCOPE AND DEFINITIONS

Article 1

Scope

This Regulation shall apply to consortia only in so far as they
provide international liner transport services from or to one or
more Community ports.

(24)

For the purposes of this Regulation, the concept of force
majeure is that laid down by the Court of Justice of the
European Communities in its established case-law.

Article 2

Definitions

(25)

(26)

(27)

Provision should be made whereby awards given at arbi-
tration and recommendations made by conciliators and
accepted by the parties are to he notified to the
Commission forthwith, in order to enable it to verify
that consortia are not thereby exempted from the condi-
tions and obligations provided for in the Regulation and
thus do not infringe the provisions of Articles 81 and
82.

It is necessary to specify, in accordance with Article 6 of
Regulation (EEC) No 479/92, the cases in which the
Commission may withdraw from companies the benefit
of the block exemption.

11 consortia benefited from the block exemption
contained in Regulation (EC) No 870/95 by application
of the opposition procedure in that Regulation which
enabled the Commission in particular to check that they
were subject to effective competition. There is no indica-
tion that circumstances have since become such that
those consortia are no longer
to effective
competition. Those consortia should therefore continue
to be exempted on the terms laid down in this Regula-
tion.

subject

For the purposes of this Regulation:

1.

2.

3.

‘consortium’ means an agreement between two or more
vessel-operating carriers which provide international
liner
shipping services exclusively for the carriage of cargo,
chiefly by container, relating to one or more trades, and the
object of which is to bring about cooperation in the joint
operation of a maritime transport
service, and which
improves the service that would be offered individually by
each of its members in the absence of the consortium, in
order to rationalise their operations by means of technical,
operational and/or commercial arrangements, with the
exception of price fixing;

‘liner shipping’ means the transport of goods on a regular
basis on a particular route or routes between ports and in
accordance with timetables and sailing dates advertised in
advance and available, even on an occasional basis, to any
transport user against payment;

‘service arrangement’ means a contractual arrangement
concluded between one or more transport users and an
individual member of a consortium or a consortium itself
under which, in return for an undertaking to commission
the transportation of a certain quantity of goods over a
given period of time, a user receives an individual under-
taking from the consortium member or the consortium to
provide an individualised service which is of a given quality
and specially tailored to its needs;

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4.

5.

‘transport user’ means any undertaking (such as shipper,
consignee, forwarder) which has entered into, or demon-
strated an intention to enter into, a contractual agreement
with a consortium (or one of its members) for the shipment
of goods, or any association of shippers;

‘independent rate action’ means the right of a maritime
conference member to offer, on a case-by-case basis and in
respect of goods, freight rates which differ from those laid
down in the conference tariff, provided that notice is given
to the other conference members.

CHAPTER II

EXEMPTIONS

Article 3

Exempted agreements

1.
Pursuant to Article 81(3) of the Treaty and subject to the
conditions and obligations laid down in this Regulation, it is
hereby declared that Article 81(1) of the Treaty shall not apply
to the activities listed in paragraph 2 of this Article when
contained in consortium agreements as defined in Articles 1
and 2 of this Regulation.

The declaration of non-applicability shall apply only to

2.
the following activities:

(a) the joint operation of

liner shipping transport services

which comprise solely the following activities:

(i) the coordination and/or joint fixing of sailing time-

tables and the determination of ports of call;

(ii) the exchange, sale or cross-chartering of space or slots

on vessels;

(iii) the pooling of vessels and/or port installations;

(iv) the use of one or more joint operations offices;

(v) the provision of containers, chassis and other equip-
ment and/or the rental, leasing or purchase contracts
for such equipment;

(vi) the use of a computerised data exchange system and/or

joint documentation system;

(b) temporary capacity adjustments;

(c) the joint operation or use of port terminals and related
services (such as lighterage or stevedoring serrices);

(d) the participation in one or more of the following pools:

cargo, revenue or net revenue;

(e) the joint exercise of voting rights held by the consortium in
the conference within which its members operate, in so far
as the vote being jointly exercised concerns the consor-
tium's activities as such;

(f) a joint marketing structure and/or the issue of a joint bill of

lading;

(g) any other activity ancillary to those referred to above in
points (a) to (f) which is necessary for their implementa-
tion.

The following clauses shall

3.
ancillary activities within the meaning of paragraph 2(g):

in particular be considered

(a) an obligation on members of the consortium to use on the
trade or trades in question vessels allocated to the consor-
tium and to refrain from chartering space on vessels
belonging to third parties;

(b) an obligation on members of the consortium not to assign
or charter space to other vessel-operating carriers on the
trade or trades in question except with the prior consent of
the other members of the consortium.

Article 4

Non-utilisation of capacity

The exemption provided for in Article 3 shall not apply to a
consortium when the
consortium includes arrangements
concerning the non-utilisation of existing capacity whereby
shipping line members of the consortium refrain from using a
certain percentage of the capacity of vessels operated within
the framework of the consortium.

CHAPTER III

CONDITIONS FOR EXEMPTION

Article 5

Basic condition for the grant of exemption

The exemption provided for in Article 3 shall apply only if one
or more of the conditions set out below are met:

(a) there is effective price competition between the members
of the conference within which the consortium operates,
due to the fact that the members are expressly authorised
by the conference agreement, whether by virtue of a statu-
tory obligation or otherwise, to apply independent rate
action to any freight rate provided for in the conference
tariff; or

(b) there exists within the conference within which the consor-
tium operates a sufficient degree of effective competition
between the conference members in terms of the services
provided, due to the fact that the conference agreement
expressly allows the consortium to offer its own service
arrangements,
the
frequency and quality of transport services provided as well
as freedom at all times to adapt the services it offers in
response to specifc requests from transport users; or

irrespective of

concerning

form,

(c) whether or not a conference operates in the trade or trades
in question, the consortium members are subject to effec-
tive competition, actual or potential, from shipping lines
which are not members of that consortium.

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Article 6

Conditions relating to market share

1.
In order to qualify for the exemption provided for in
Article 3, a consortium must possess on each market upon
which it operates a market share of under 30 % calculated by
reference to the volume of goods carried (freight tonnes or
20-foot equivalent units) when it operates within a conference,
and under 35 % when it operates outside a conference.

2.
The exemption provided for in Article 3 shall continue to
apply if the market share referred to in paragraph 1 of this
Article is exceeded during any period of
two consecutive
calendar years by not more than one tenth.

3. Where one of the limits specified in paragraphs 1 and 2
is exceeded, the exemption provided for in Article 3 shall
continue to apply for a period of six months following the end
of the calendar year during which it was exceeded. This period
shall be extended to 12 months if the excess is due to the
withdrawal from the market of a carrier which is not a member
of the consortium.

Article 7

Opposition procedure

1.
The exemption provided for in Articles 3 and 10 shall
also apply to consortia whose market share on any market
upon which it operates exceeds the limits laid down in Article
6 but does not, however, exceed 50 % on any market, on
condition that the agreements in question are notified to the
Commission in accordance with the provisions of Commission
Regulation (EC) No 2843/98 (1), and that the Commission does
not oppose such exemption within a period of six months.

The period of six months shall run from the date on which
notification takes effect in accordance with Article 4 of Regula-
tion (EC) No 2843/98.

Paragraph 1 shall apply only if express reference is made
2.
to this Article in the notification or in a communication
accompanying it.

3.

The Commission may oppose the exemption.

It shall oppose the exemption if it receives a request to do so
from a Member State within three months of the forwarding to
the Member State of the notification referred to in paragraph 1.
The request must be justified on the basis of considerations
relating to the competition rules of the Treaty.

4.
The Commission may withdraw its opposition to the
exemption at any time. However, where the opposition was
raised at the request of a Member State and the request is
maintained, it may be withdrawn only after consultation of the
Advisory Committee on Restrictive Practices and Dominant
Positions in Maritime Transport.

If the opposition is withdrawn because the undertakings
5.
concerned have shown that the conditions of Article 81(3) are
fulfilled, the exemption shall apply from the date of noti-
fication.

(1) OJ L 354, 30.12.1998, p. 22.

If the opposition is withdraws because the undertakings
6.
concerned have amended the agreement so that the conditions
of Article 81(3) are fulfilled, the exemption shall apply from
the date on which the amendments take effect.

If the Commission opposes exemption and its opposition
7.
is not withdrawn,
the notification shall be
governed by the provisions of Section II of Regulation (EEC)
No 4056/86.

the effects of

Article 8

Other conditions

Eligibility for the exemptions provided for in Articles 3 and 10
shall be subject to the following conditions:

(a) the consortium must allow each of its members to offer, on
the basis of an individual contract, its own service arrange-
ments;

(b) the consortium agreement must give member companies
the right to withdraw from the consortium without finan-
cial or other penalty such as, in particular, an obligation to
cease all transport activity in the trade or trades in ques-
tion, whether or not coupled with the condition that such
activity may be resumed only after a certain period has
elapsed. This right shall be subject to a maximum notice
period of six months which may be given after an initial
period of 18 months starting from the entry into force of
the agreement.

in the case of a highly integrated consortium
However,
which has a net revenue pool and/or high level of invest-
ment due to the purchase or charter by its members of
vessels specifically for the purpose of setting up the consor-
tium, the maximum notice period shall be six months,
which may be given after an initial period of 30 months
starting from the entry into force of the agreement;

(c) where a consortium operates with a joint marketing struc-
ture, each member of the consortium must be free to
engage in independent marketing without penalty subject
to a maximum period of notice of six months;

(d) neither the consortium nor consortia members shall, within
the common market, cause detriment to certain ports, users
or carriers by applying to the canriage of the same goods
and in the area covered by the agreement, rates and condi-
tions of carriage which differ according to the country of
origin or destination or port of loading or discharge, unless
such rates or conditions can be economically justified.

CHAPTER IV

OBLIGATIONS

Article 9

Obligations attaching to exemption

1.
The obligations provided for in paragraphs 2 to of this
Article shall be attached to the exemptions provided for in
Article 3 and Article 13(1).

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There shall be real and effective consultations between
2.
users or their representative organisations, on the one hand,
and the consortium, on the other hand, for the purpose of
seeking solutions on all important matters, other than purely
operational matters of minor
importance, concerning the
conditions and quality of scheduled maritime transport services
offered by the consortium or its members.

These consultations shall take place whenever requested by any
of the abovementioned parties.

The consultations must take place, except in cases of force
majeure, prior to the implementation of the measure forming
the subject of the consultation. if, for reasons of force majeure,
the members of the consortium are obliged to put a decision
into effect before consultations have taken place, any consulta-
tions requested shall take place within 10 working days of the
date of the request. Save in the case of such force majeure, to
which reference shall be made in the notice announcing the
measure, no public announcement of the measure shall be
made before the consultations.

The consultations shall
following procedural stages:

take place in accordance with the

(a) prior to the consultation, details of the subject matter of
the consultation shall be notified in writing by the consor-
tium to the other party;

(b) an exchange of views shall take place between the parties
either in writing or at meetings or both in the course of
which the representatives of the consortium members and
of the shippers taking part shall have authority to reach a
common point of view and the parties shall use their best
efforts to achieve that end;

(c) where no common point of view can be reached despite
the efforts of both parties,
the disagreement shall be
acknowledged and publicly announced. It may be brought
to the Commission's attention by either party;

(d) a reasonable period for the completion of consultations
may be fixed, if possible, by common agreement between
the two parties. That period shall be not less than one
month, save in exceptional cases or by agreement between
the parties.

The

conditions

concerning the maritime

transport
3.
services provided by the
consortium and its members,
including those relating to the quality of such services and all
relevant modifications, shall be made available on request to
transport users at reasonable cost and shall be available for
examination without cost at the offices of the consortium
members, or the consortium itself, and their agents.

4.
Arbitration awards and recommendations of conciliators,
which have been accepted by the parties and which settle
disputes concerning practices of consortia covered by this
Regulation, shall be notified forthwith to the Commission by
the consortium.

5.
Any consortium claiming the benefit of this Regulation
must be able, on being given a period of notice which the
Commission shall determine on a case-by-case basis and which

less than one month,
that

the
shall be not
Commission's request
the conditions and obligations
imposed by Articles 5 to 8 and paragraphs 2 and 3 of this
article are met and must submit to it the consortium agreement
in question within this period.

to demonstrate at

Article 10

Exemption for agreements between transport users and
consortia on the use of scheduled maritime transport
services

Agreements, decisions and concerted practices between trans-
port users or their representative organisations, on the one
hand, and a consortium exempted under Article 3, on the other
hand, concerning the conditions and quality of liner shipping
services provided by the consortium and all general questions
connected with such services in so far as they arise out of the
consultations provided for in paragraph 2 of Article 9, are
hereby exempted from the prohibition laid down in Article
81(1) of the Treaty.

CHAPTER V

MISCELLANEOUS PROVISIONS

Article 11

Professional secrecy

Information acquired as a result of the application of
1.
Article 7 and paragraph 5 of Article 9 shall be used only for
the purposes of this Regulation.

The Commission and the authorities of

the Member
2.
States, their officials and other servants shall not disclose infor-
mation acquired by them as a result of the application of this
Regulation which is of the kind covered by the obligation of
professional secrecy.

The provisions of paragraphs 1 and 2 shall not prevent
3.
publication of general
information or studios which do not
contain information relating to particular undertakings or asso-
ciations of undertakings.

Article 12

Withdrawal of block exemption

The Commission may withdraw the benefit of this Regulation,
in accordance with Article 6 of Regulation (EEC) No 479/92,
where it finds in a particular case that an agreement, decision
or concerted practice exempted under Article 3 or Article 13(1)
of this Regulation nevertheless has certain effects which are
incompatible with the conditions laid down by Article 81(3) or
are prohibited by Article 82 of the Treaty, in particular where:

(a) in a given trade, competition from outside the conference
within which the consortium operates or from outside a
particular consortium is not effective;

(b) a consortium fails repeatedly to comply with the obliga-

tions provided for in Article 9;

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(c) the behaviour of a consortium produces effects that are

incompatible with Article 82 of the Treaty;

(d) such effects result from an arbitration award.

Article 13

Transitional provisions

1.
Article 81(1) of the Treaty shall not apply to agreements
in force on 25 April 2000 which fulfil, on that date, the
exemption requirements laid down by Regulation (EC) No 870/
95 and to which the opposition procedure provided for by
Article 7 of that Regulation was applied.

A notification made before the entry into force of this
2.
Regulation pursuant to Article 7 of Regulation (EC) No 870/95
and in respect of which the period of six months has not
expired on 25 April 2000 shall be deemed to have been made
pursuant to Article 7 of this Regulation.

Article 14

Entry into force

This Regulation shall enter into force on 26 April 2000.

It shall apply until 25 April 2005.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 19 April 2000.

For the Commission

Mario MONTI

Member of the Commission