2003/625/EC: Commission decision of 3 July 2001 declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement (Case COMP/ JV.55 — Hutchison/RCPM/ECT) (notified under document number C(2001) 1723) (Text with EEA relevance.)
Date: 2001-07-03
Institutions: European Commission
Subjects: economic concentration, exchange of information, harbour installation, merger control, provision of services

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(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 3 July 2001

declaring a concentration to be compatible with the common market and the functioning of the
EEA Agreement

(Case COMP/ JV.55 — Hutchison/RCPM/ECT)

(notified under document number C(2001) 1723)

(Only the English text is authentic)

(Text with EEA relevance)

(2003/625/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European Com-
munity,

I.

INTRODUCTION

Having regard to the Agreement on the European Economic
Area, and in particular Article 57 thereof,

(1)

Having regard to Council Regulation (EEC) No 4064/89 of
21 December 1989 on the control of concentrations between
undertakings (1), as last amended by Regulation (EC) No 1310/
97 (2), and in particular Article 8(2) thereof,

Having regard to the Commission decision of 1 March 2001
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,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

(2)

(3)

( 1) OJ L 395, 30.12.1989, p. 1; corrigendum in OJ L 257, 21.9.1990,

p. 13.

( 2) OJ L 180, 9.7.1997, p. 1.
( 3) OJ C 210, 5.9.2003.

On 31 January 2001, the Commission received notifi-
cation pursuant
to Article 4 of Regulation (EEC)
No 4064/89 (‘the merger Regulation’) by which the
undertakings Hutchison Ports Netherlands BV (‘Hutchi-
son’) and Rotterdam Container Participatie Maatschappij
BV (‘RCPM’) acquire within the meaning of Article 3(1)(b)
of that Regulation joint control of the undertaking
Europe Combined Terminals BV.

On 1 March 2001, the Commission decided in accord-
ance with Article 6(1)(c) of the merger Regulation and
Article 57 of the EEA Agreement to initiate proceedings
in this case.

The present operation was preceded by a similar oper-
ation notified to the Commission pursuant to Article 4
of the merger Regulation in March 1999 (Case COMP/
M.1412). That operation involved the proposed joint
acquisition by Hutchison Port Holdings Ltd (‘HPH’) and
Rotterdam Municipal Port Management (‘RMPM’) of ECT
through a single-purpose holding company so that the
parties would have joint control of ECT.

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(4)

(5)

(6)

(7)

(8)

(9)

In June 1999, the Commission issued a statement of
objections, considering that the combination of HPH’s
container terminals in the United Kingdom and ECT’s
container terminals in Rotterdam would lead to the
creation of a dominant position on the market for the
provision of stevedoring services to deep-sea container
ships in northern Europe.

In July 1999, HPH and RMPM decided to abandon the
operation.

The current operation was originally notified on 3 Nov-
ember 1999 by Hutchison Atlantic Ltd, Rotterdam
Container Participatie Maatschappij BV and ABN AMRO
Effecten Compagnie BV (‘ABN’) as an agreement falling
within the scope of Council Regulation No 17 of
6 February 1962,
first Regulation implementing
Articles 85 and 86 of the Treaty (4), as last amended by
Regulation (EC) 1/2003 (5) (Case COMP/37.688/D2 —
RCPM+Hutchison/ABN AMRO).

to Article 18 of

On 24 October 2000, the Commission issued a state-
ment of objections pursuant
the
merger Regulation (Case COMP/JV.52 — ECT/Port of
Rotterdam), finding that Hutchison Altantic Ltd (through
its subsidiary Hutchison Ports Netherlands BV (Hutchi-
son)) and RMPM (through its subsidiary RCPM) had
acquired de facto joint control of ECT and that the
notified transaction therefore constituted a concen-
tration within the meaning of Article 3(1)(b) of the
merger Regulation. The Commission concluded that by
failing to notify the transaction under the merger
Regulation and by putting the concentration into effect
before such notification, Hutchison and RMPM had
infringed the provisions of Articles 4(1) and 7(1) of the
merger Regulation.

The Commission took the view that Hutchison Altantic
Ltd and RMPM had acquired joint control of ECT on the
basis of a number of elements, which, taken collectively,
indicated that the two parties would act together when
exercising their voting rights in ECT (through ECT
Beheer).

II. THE PARTIES

(10) The main acquiring parties are:

(a) Hutchison Netherlands BV (‘Hutchison’), a subsidi-
ary of Hutchison Atlantic Ltd, which in turn is an
indirect subsidiary of Hutchison International Port
Holdings Ltd (‘HIPH’). All of these undertakings are
members of the Hutchison Whampoa group, Hong
Kong. The latter is a conglomerate with a diverse
range of activities. The main activity of HIPH and
its subsidiaries is the provision of stevedoring
services in ports world-wide.
In Europe, HIPH
controls, inter alia, the deep-sea container terminals
of Felixstowe and Thamesport (United Kingdom);

(b) Rotterdam Container Participatie Maatschappij BV
(RCPM), a holding company that is wholly owned
Port Management
by Rotterdam Municipal
(RMPM). The latter is a department of the munici-
pality of Rotterdam. RMPM is responsible for the
development and management of
the port of
Rotterdam;

(c) ABN AMRO Effecten Compagnie BV (ABN), a
wholly-owned subsidiary of ABN AMRO Bank NV.
ABN AMRO Bank is engaged in the purchasing,
selling, management and administration of securi-
ties, property and other assets; the granting of
loans; asset management and acting as a banker; it
also participates in other companies.

(11) The acquired undertaking, Europe Combined Terminals
BV (ECT), is a company engaged in the provision of
stevedoring services at certain European ports, foremost
Rotterdam.

(12) The notifying parties are Hutchison and RCPM. The
notification on form CO has been submitted ‘without
prejudice’ to the parties’ view that the operation does
not constitute a concentration.

III. THE OPERATION

Hutchison Atlantic and RMPM replied to the statement
of objections on 20 December 2000, rejecting the
Commission’s view of the operation. By letter of 19 Janu-
ary 2001, the parties withdrew their request for an oral
hearing, while indicating that they might submit further
written statements.

(13) The acquiring parties have created a new holding
company, ECT Beheer BV (‘ECT Beheer’) which holds
100 % of the share capital of ECT. Hutchison and
RMPM/RCPM (6) each have 35 % of the shares in ECT
Beheer, with ABN holding 28 % and an employees’ trust
(Star) holding the remaining 2 %.

( 4) OJ 13, 21.2.1962, p. 204/62.
( 5) OJ L 1, 4.1.2003, p. 4.

(6) In the following ‘RMPM’ and ‘RCPM’ are used interchangeably, as
RCPM is controlled by RMPM and has no business activity of its
own.

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IV. CONCENTRATION

(14) The present operation leads to Hutchison and RMPM
acquiring joint control of ECT. In this respect, para-
graph 32 of the Commission notice on the concept of
concentration under Council Regulation (EEC) No 4064/
89 on the control of concentrations between undertak-
ings (7) states that: ‘[...] collective action can occur on a
de facto basis where strong common interests exist
between the minority shareholders to the effect that they
would not act against each other in exercising their
rights in relation to the joint venture’.

(15) The Commission bases its conclusions regarding the
nature of the present operation on the following el-
ements, which, taken collectively, show in its view that
there are strong common interests between Hutchison
and RMPM such that the parties when voting will not
act against each other:

(a) a commonality of understanding between the parties
(‘the strategic investors’) established through their
joint involvement in the previous operation (Case
COMP/M.1412, described in paragraph 3) and the
absence of any such obvious commonality as be-
tween either of these two parties and the third
main shareholder, ABN (‘the financial investor’). The
involvement in the previous operation gave each
strategic investor the opportunity to explore the
other’s objectives in investing in ECT and come to an
understanding as to how these objectives might be
reconciled. To a large extent these objectives were
and are common objectives (8). By contrast, the
information available to the Commission (9) shows
that ABN’s role in the operation is that of project
financier to the two strategic investors and that its
decision to take up a substantial equity stake was the
action of a ‘white knight’ seeking to assist
two
important actual or potential clients. This infor-
mation shows further that ABN intends to reduce the
size of its stake substantially (that is to say, by 50 %
or more) as soon as it has the opportunity to do so.
This short-term view must be contrasted with the
long-term commitment,
two strategic investors’
manifested,
inter alia, through an undertaking to
maintain a substantial shareholding in ECT for a
period of at least five years;

(b) the structure of the shareholdings and voting rules,
which seem to have been tailored in such a way as to
allow the two parties to exercise joint control over
ECT. Hutchison and RMPM together have 70 % of
the shares and voting rights, with a 60 % majority
being required for most decisions (10); they also have

(7) OJ C 66, 2.3.1998, p. 5.
(8) For example, to secure the completion of the Delta 2000 to
2008 development, something in which both Hutchison and
RMPM had a clear interest.

(9) Provided in the context of Cases COMP/37.688/D2 and COMP/
JV.52, which information the parties have agreed may also be
used for the purposes of the present case.

( 10) Save those affecting basic shareholder rights, where a 75 %

majority is required.

four out of five seats on the Board of Supervisory
Directors (11). Although ABN would theoretically be
able to form a voting majority with either of the
strategic investors, the evidence shows that this was
not the intention when the voting rights and rules
were decided (12);

(c) a high degree of mutual dependency as between the
two strategic investors regarding the success of their
respective investments in ECT. Hutchison thus counts
on RMPM to ensure the approval of future ECT
development plans, RMPM in turn expects Hutchison
to provide expertise and capital.
In the former
respect, RMPM has stated that it has ‘chosen’ ECT to
be the one and only stevedore in the western part of
the port of Rotterdam (Maasvlakte) to receive and
handle large vessels — Hutchison’s expectation that
RMPM will give preference to ECT when considering
applications for further expansion in Rotterdam must
accordingly be regarded as well-founded. Expansion
is vital if ECT is to maintain its position as the leading
container terminal operator in northern Europe (13).
Equally essential is access to expertise and capital.
Hutchison, as the world’s leading container terminal
operator and financially well endowed, is indisput-
ably well placed to assist (14);

(d) a common guarantee provided by the strategic
investors for the benefit of the financial investor. The
common guarantee takes the form of a clause
(clause 11(5))
in the shareholders’ agreement by
which the two strategic investors undertake to main-
tain a minimum shareholding of at least 24 % each
in ECT for a period of five years following closing.
The evidence shows that this clause serves a dual
purpose: on the one hand it provides each strategic
investor with reassurance as to the seriousness of the
other’s commitment to ECT, on the other hand it
provides an assurance to the financier, ABN, that its
exposure on loans to ECT Beheer is limited by the
backing of the Hutchison Whampoa Group and the
Port of Rotterdam. Clause 11(5) must be read in
conjunction with provisions in the credit agreement
(the ‘term loan agreement’) that give ABN the right
to call in the loans granted to ECT Beheer should the
strategic investors’ shareholding fall below the agreed
minimum level.

(11) ABN is entitled to two seats, but has filled only one.
(12) ABN increased its stake from 14 % to 28 % (a level of
shareholding that would allow it, theoretically, to form a voting
majority with either of the two strategic investors) at the very
last minute, following the abrupt withdrawal of the financial
institution ING.

(13) Available capacity is becoming saturated.
(14) An opinion shared by other knowledgeable observers: Baron
is thus
Delwaide, president of the Antwerp Port Authority,
quoted as saying:
‘There will be some shipowners who will
choose Rotterdam because of Hutchison’ (Lloyd’s List of 18 May
2001, Annex 8 to the parties’ statement of defence of 30 May
2001).

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(16) The above elements tie Hutchison and RMPM closely
together and make it unlikely that either would choose
to act against the other when voting.

(21)

For all of the above reasons, it is concluded that the
current operation constitutes a concentration falling
within the scope of the merger Regulation, as Hutchison
and RMPM acquire joint control over ECT within the
meaning of Article 3(1)(b) of that Regulation.

(17) The parties have argued,

inter alia,

that RMPM, by
indicating its willingness to make land available to
Maersk for the latter to develop its own terminal at the
Delta site in Rotterdam (which subsequently led to the
establishment of the Maersk Delta joint venture between
Maersk and ECT), has acted contrary to the interests of
ECT (and of Hutchison). Further evidence of diverging
interests is provided, in the parties’ view, by RMPM’s
decision to grant rights to the Euromax terminal (a joint
venture between ECT and P & O Nedlloyd). The parties
claim that the establishment of these terminals will result
in a significant loss of revenue and profit for ECT.

(18) The Commission notes that the parties themselves have
contended that the alternative to allowing Maersk and
P & O Nedlloyd to obtain their ‘own’ facilities was to see
these lines depart from Rotterdam altogether. Whether
or not there was ever a significant risk of this occur-
ring (15), RMPM could legitimately consider that it was
in the best interests both of ECT and of RMPM to tie
these two shipping lines to Rotterdam through joint
venture agreements. It should be noted that there is
every indication that Maersk and P & O Nedlloyd would
have preferred to have complete ownership and control
of ‘their’ respective terminals. The fact that ECT was
awarded a substantial stake in both joint ventures
(33,3 % in Maersk Delta; 50 % in Euromax) can be
directly attributed to RMPM using its influence and
leverage as port manager (allocating sites and leases) to
obtain the best possible outcome for ECT.

(19) The parties have also referred to various declarations by
the chairman of RMPM to the effect that it is impossible
for RMPM, as port manager, to give ECT preferential
treatment. In this respect, it is sufficient to note that
these declarations are contradicted by various statements
that RMPM has made to the ECT management and
workers’ council (16).

(20)

Finally, the parties have stated that ABN’s participation
in ECT is neither transitory nor restricted to the role of
project financier. Again, this statement is contradicted
by various statements of the party in question (17). ABN
AMRO has made no secret of its desire to reduce its
exposure to ECT at the earliest opportunity.

V. COMMUNITY DIMENSION

(22) The undertakings concerned have a combined aggregate
world-wide turnover (18) of EUR 7 386 million (Hutchi-
son, EUR 6 694 million; RMPM, EUR 350 million;
ECT, EUR 342 million). They each have an aggregate
Community-wide turnover in excess of EUR 250 million
(Hutchison, EUR [...] (*) million; RMPM, EUR [...]* milli-
on; ECT, EUR [...]* million), and none of the undertakings
concerned achieves more than two thirds of its aggregate
Community-wide turnover within one and the same
Member State. The notified operation therefore has a
Community
of
Article 1(2) of the merger Regulation.

dimension within the meaning

VI. ASSESSMENT UNDER ARTICLE 2 OF
THE MERGER REGULATION

A. Relevant market

1. Product markets

(23) Hutchison and ECT are both container terminal oper-
ators providing stevedoring services to deep-sea con-
tainer vessels in northern Europe. There is no, or only
very marginal, overlap between the parties to the
concentration with regard to other business activities.

(24) The parties themselves propose (19) that the relevant
product market should be that for the provision of
stevedoring services to deep-sea container ships. This
market definition can be accepted, subject to the follow-
ing remarks and modifications.

( 15)

In view of these lines’ commitment to the European Rail Shuttle,
the need to coordinate service patterns and schedules with
alliance partners, and shipper preferences, it may be doubted
whether it would be commercially viable for Maersk and P & O
to transfer the bulk of their operations away from Rotterdam.
( 16) [Quote from minutes of a meeting of ECT’s Supervisory Board]*
( 17) [Quotes from submissions to and correspondance with the

Commission]*

(*) Parts of this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

(18) Figures for the financial year 1999. Turnover calculated in
accordance with Article 5(1) of the merger Regulation and the
Commission notice on the calculation of turnover. To the extent
that figures include turnover for the period before 1 January
1999, they are calculated on the basis of average ECU exchange
rates and translated into EUR on a one-for-one basis.

(19) Form CO, page 25, ‘Relevant market’.

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(25) Vessels carrying non-containerised cargoes and short-
sea vessels have other requirements with regard to
services and facilities than deep-sea container vessels.
Similarly, while it is customary to distinguish between
different container traffic flows, the stevedoring service
provided in respect of these different traffic flows is
essentially the same.

(26) Container terminal throughput can be broken down by

traffic flow as follows:

(a)

(b)

hinterland traffic (also known as ‘direct deep-sea’),
that is, containers transported directly onto/from a
deep-sea container vessel to/from the hinterland
(via barge, truck or train); and

transhipment traffic, that is, containers destined for
onward transportation to other ports. Tranship-
ment traffic can in turn be subdivided into relay
traffic and feeder traffic. ‘Relay’ refers to containers
moved between deep-sea vessel and deep-sea vessel
(for example, containers transferred from a Far East
liner shipping service to a transatlantic service).
‘Feeder’ concerns the movement to or from deep-
sea vessels from or to short-sea vessels (feeder
vessels).

(27)

In its decision of 1 March 2001,
the Commission
considered that the available evidence at that stage of
the procedure did not support the conclusion that one
or more of hinterland, feeder or relay traffic should be
regarded as distinct markets.

(28)

Following further investigation, that conclusion should
be revised.

Hinterland and transhipment

(30) Ocean Shipping Consultants Ltd (OSC), in its report
‘North European containerisation’ (20), appears to identify a
transhipment hub port market which is distinct from
the various regional hinterland port markets (21). Admit-
tedly, hinterland and transhipment flows are linked
inasmuch as most deep-sea (22) container vessels carry
both hinterland and transhipment containers and in that
the choice of port of call
is dictated primarily by
hinterland considerations. However, the range of ports
and terminals that may be potential substitutes for
transhipment traffic is not necessarily identical to the
range of ports and terminals that may be substitutes for
specific hinterland traffic.

(31) A case in point is the identification by OSC of a United
Kingdom/Ireland market, on which the main United
Kingdom deep-sea ports compete primarily with each
other for United Kingdom/Ireland hinterland traffic, but
a broader ‘hub port market’ on which the United
Kingdom ports compete not only with each other but
also with North Continental terminals for transhipment
traffic (23). The latter traffic is, as the notifying parties
have repeatedly stressed,
that is to say,
transhipment can, in principle, take place at any North
European port at which the vessel in question calls to
load or unload hinterland cargo. The range of possible
substitute ports for transhipment volumes is therefore
greater than that for volumes destined for or originating
in any specific hinterland. This is reflected in the
pricing policy of the North European terminal operators:
handling charges per move for transhipment containers
are, in general, lower (24) than the rates per move for
hinterland containers.

‘footloose’;

(29) The parties have argued that hinterland and tranship-
ment traffic flows are inseparable in that transhipment
traffic is intrinsically linked and secondary to hinterland
traffic. With regard to a possible further breakdown of
transhipment traffic into feeder and relay flows, the
parties maintain that feeder and relay services are
negotiated under one terminal contract and that terminal
operators neither can, nor do in practice, price discrimi-
nate between these two flows. It therefore follows, in the
parties’ view, that neither hinterland nor transhipment,
and certainly not feeder and relay, constitute discrete
relevant markets.

(20) Two hundred and twenty-three pages, published by OSC in the

United Kingdom in 2000.

(21) See, inter alia, pages 12 and 13 and section 6 of North European
containerisation. The report identifies four regional markets: north
continent west (Rouen to Amsterdam), north continent east
(Hamburg/Bremerhaven), United Kingdom/Ireland and Scandina-
via/Baltic.

(22) For the reasons given at paragraph 25, the Commission distin-
guishes between services provided to deep-sea container vessels
and those provided to short-sea vessels and non-unitised (con-
tainer-carrying) vessels. The activity (on which an overlap occurs)
exercised by the parties to the concentration consists in the
provision of stevedoring services to deep-sea container vessels.

(23) North European containerisation, page 13.
(24) The parties state that the charge per transhipment move is on
average [considerably]* lower than that for a hinterland move.

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(32) The arguments and submissions made by the parties
support the notion of (stevedoring services in respect of)
hinterland traffic and transhipment traffic as discrete
relevant markets. The parties thus contend that there is
no significant competition between the United Kingdom
and north continental ports for each other’s hinterland
and that real competition can only exist between the
main ports within each separate hinterland region (for
example, the Benelux region (Belgium, the Netherlands
and Luxembourg) and the United Kingdom region) (25).
The parties further point to evidence of carriers switch-
ing volumes between ports. This evidence (26) shows
that switches of entire liner shipping services or of
individual strings occur almost exclusively between ports
in the same hinterland region (for example, between
Rotterdam and Antwerp, Felixstowe and Thamesport,
Hamburg and Bremerhaven), whereas switches of tran-
shipment volumes occur between ports located in
different hinterland regions (for example, Rotterdam and
Bremerhaven, Felixstowe and Antwerp).

(33) Replies from third parties, while confirming that the
basic stevedoring service provided in respect of hinter-
land and transhipment traffic is essentially the same,
generally support the view that the range of possible
substitute terminals and ports for hinterland traffic is
different from the range of substitutes for transhipment
traffic.

Conclusion on the product market

(35)

It is concluded from the above that (the provision of
stevedoring services in respect of) hinterland traffic and
transhipment traffic each constitutes a discrete relevant
product market, but that there is insufficient evidence to
justify a further breakdown of the transhipment market
into discrete feeder and relay markets.

(36) The notifying parties agree with this conclusion (29).

2. Geographic dimension

Hinterland

(37) The available market studies and other evidence suggest
that there are a number of discrete regional hinterland
markets within northern Europe.

Feeder and relay

(38) OSC has thus identified three main hinterland re-

gions (30):

(34) OSC distinguishes between the ‘hub and spoke’ (that is
to say, feeder) and relay sectors, but acknowledges that
the two areas are blurred and that statistics are not fully
comprehensive (27). This is confirmed by the Com-
mission’s own investigation, which has shown that
individual operators (shipping lines and terminal oper-
ators) have differing interpretations of the terms ‘feeder’
and ‘relay’ (28). The investigation also shows that most
terminal operators currently have difficulty in identifying
and quantifying feeder and relay flows so that it could
reasonably be argued that they would have difficulty in
price discriminating between the two, should they wish
to do so.

(a)

‘north Continent west’ comprises all terminals in
the range between Rouen and Amsterdam, with
competitive pressures primarily focused between
Antwerp and Rotterdam, with additional capacity
at Le Havre;

(b)

‘north Continent east’ currently consists primarily
of the ports of Bremerhaven and Hamburg;

(c)

The ‘United Kingdom/Ireland market’ encompasses
the British Isles and includes the major United
Kingdom gateway terminals (31).

( 25) Form CO, page 53.
( 26) See, inter alia, the parties’ response to the Commission’s question-

naire of 20 March 2001.

( 27) North European containerisation, pages 176 and 177.
( 28) Despite the Commission’s efforts to provide unambiguous defi-
nitions of these traffic flows in its questionnaires to the notifying
parties and third parties.

(29) Statement of defence of 30 May 2001 (‘statement of defence’),

paragraphs 32, 33, 34 and 37.

(30) North European containerisation, pages 12 and 13. Drewry Shipping
Consultants Ltd (DSC), in its report European container port
market data (December 2000), uses a slightly different break-
down: United Kingdom, Benelux, Germany/Scandinavia, France.
(31) Felixstowe, Southampton and Thamesport are relevant for this

case.

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(39) A fourth region consists of

the ‘Scandinavia/Baltic
market’; the volumes involved do not however, as a rule,
(an exception being the port of
justify a direct call
Gothenburg) (32). This market is primarily served by
feeder links from terminals located in one or more of
the three main regions (for example, from the North Sea
Terminal in Bremerhaven).

(40) OSC’s conclusions regarding northern European regional
inter alia, by the
hinterland markets are confirmed,
service patterns of the main shipping lines and alliances,
which generally provide for at least one direct call in
each of the main hinterland regions identified above.

(41) Competition from southern European ports is increas-
ing. However, as far as hinterland markets are concerned,
third party comments indicate that this competition is
currently limited to reclaiming the ‘natural’ local and
regional catchment areas of the southern European ports
and contesting specific central European markets such
as Switzerland and Austria (33). There is little evidence of
competition from southern European ports for the
‘natural’ (that is to say, local and regional) catchment
areas of the northern European ports, although the
reverse may be true. As regards the third party answers
quoted by the parties in their statement of defence (see
paragraph 41 and section V.3 of the statement of
defence) the following should be noted:

(d) APL (37) sees benefits to serving, ‘[...] this hinterland
(including the Rhur [sic] area) [...]’ because of ‘[...]
reduced transit times from Asia.’ The shipping line
stated however that the possible overall cost savings
could only be achieved ‘[...] if a change of schedule
is implemented which reduces the number of
vessels currently on the route.’ It should further be
noted that none of APL’s traffic related to Gioia
Tauro or Algeciras: ‘[...] has previously moved over
a north Europe port.’ As regards the potential
attractiveness of southern European ports in gen-
eral APL noted that ‘[a]s hinterland connections
improve in southern Europe, Med ports will see
their deep-sea traffic increase.’;

for example (38),

(e) Hanjin, also quoted in the statement of defence as
arguing in favour of competition from southern
European ports should however be quoted com-
that:
pletely because it states,
‘[...Algeciras and Gioia Tauro] cannot be seen as
substitutes for North European ports.’ It adds (39)
that it does ‘[...] not believe that the efforts of
Mediterranean ports [to develop their market pos-
ition] will be left unanswered by the Northeuropean
[sic] ports. A lot of cargo traditionally goes via
Northeuropean ports, and these ports definitely
will safeguard their interests.’

(a)

(b)

Eurogate, after having explained the situation at
Contship Italia (34), states that the Mediterranean
ports are competitors only to a limited extent and
could therefore hardly be seen as substitutes;

(42)

as regards the port of Algeciras, operated by an
A. P. Møller subsidiary, it should be noted that this
port is (geographically speaking) at the crossroads
between the north-south and east-west services and
therefore not easily comparable with the ports in
the north European range. The answer quoted by
the parties (35) moreover does not indicate from
where volumes have been transferred;

(c)

it should further be noted that HHLA states clearly
that it does not see Mediterranean ports as a
substitute for deep-sea ports in northern Eur-
ope (36);

It is concluded from the market studies (40) submitted by
the parties that there is a significant degree of overlap
between the various north-continent hinterland markets,
but that there is only a limited degree of overlap between
the north-continent hinterland markets and the United
Kingdom/Ireland hinterland market. This is a view
supported by the notifying parties and several third
parties. The precise delineation of the various hinterland
markets can therefore be left open, as it is sufficient for
the purpose of this case to note that the United Kingdom/
Ireland market (on which Hutchison is present) and the
continental markets (on which ECT is present) constitute
discrete relevant markets. In the light of the limited
degree of overlap between the north continent and
the United Kingdom/Ireland hinterland markets the
concentration will neither create nor strengthen a domi-
nant position on any hinterland market. There is there-
the
fore no need to further assess the impact of
concentration on these markets.

( 32) The other main ports present on this market are: Wallhamn,
Oslo, Bergen, Helsinki, Kotka, Hamina, Rauma, St Petersburg,
Tallinn, Riga, Ventspils, Klaipeda, Gydnia, Szczecin and Gdansk
(see North European containerisation, pages 146 to 149).

( 33) A view shared by OSC — see North European containerisation,

page 23.

( 34) Page 1867 of the file.
( 35) Page 2884 of the file.
( 36) Page 3741 of the file.

(37) Pages 2803 and 2804 of the file.
(38) Page 2315 of the file.
(39) Page 2316 of the file.
(40) See,

inter alia, OSC Briefing paper, page 9 (‘Review of market

share’).

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Transhipment

(43) The available evidence suggests that the potential substi-
tutes for transhipment traffic in northern Europe include
all main deep-sea ports in the Gothenburg-Le Havre
range (41); that is to say, all ports having sufficient
hinterland volumes to justify a direct call by a container
liner shipping service (42).

(44) The Commission considered whether Algeciras should
be included in the range of potential substitutes. It has
concluded that this question can be left open in the
instant case, as [almost all]* of
the throughput of
the main Algeciras container terminal (43), which is
controlled by the A. P. Møller group, is generated by
Maersk Sealand, an A. P. Møller subsidiary (44). These
volumes represent captive production, which, for the
reasons given below at recital 71, should not be included
in the market when determining market shares (45). The
inclusion of Algeciras in the relevant market would
therefore have little or no impact on the structure of
that market.

(45) The parties have argued that the range of substitutes
should be extended to include other southern European
ports (see section V.3 of the statement of defence). They
point,
the transhipment
throughput of the southern European ports has grown
dramatically in recent years, both in absolute terms and
as a proportion of overall northern and southern
European transhipment traffic.

to the fact

inter alia,

that

( 41) A view confirmed by market studies (for example, Briefing Paper
and North European containerisation), by the notifying parties and
by third parties (customers and competitors).

( 42) Felixstowe, Thamesport, Southampton, Le Havre, Zeebrugge,
Antwerp, Rotterdam, Bremerhaven, Hamburg, Gothenburg.
( 43) The Maersk Sealand terminal had an estimated capacity in 1999
of 2 100 000 TEU (20-foot equivalent units — the most common
container size). The other Algeciras terminal, Isla Verde, had an
estimated capacity of 200 000 TEU (Source: Drewry, European
container port market data, December 2000, page 24).

( 44) Source: A. P. Møller (reply to Commission’s request for infor-

mation).

( 45) The Algeciras facility is one of the main European hubs of Maersk
Sealand and forms an essential
link in that line’s shipping
operations. There is no evidence that Maersk Sealand would
contemplate interrupting and inconveniencing its own shipping
operations in order to create additional capacity to accommodate
third party volumes.

(46) The growth of transhipment traffic in southern Europe
is not
indicative of substantial competition for this
traffic as between the northern European and southern
European port ranges. While some southern European
ports may indeed serve relay traffic on Equatorial trades,
they are not an alternative for northern European ports
with regard to feeder traffic (46). In this context it should
be noted that relay traffic accounts for less than a quarter
of overall northern European transhipment volumes (47).
It should further be noted that the increase of tranship-
ment traffic in southern Europe is largely due to the
growth in importance of regional feeder hubs, such as
Gioia Tauro. These hubs act as distribution centres for
traffic destined for those Mediterranean ports that
generate insufficient hinterland volumes to justify a
direct call by a major liner shipping service. These
regional southern European hubs provide only marginal
competition to the main northern European ports, the
prime function of which, with regard to transhipment,
is to act as regional distribution centres for traffic to and
from the less important (in terms of hinterland volumes)
northern European ports. Note has also been taken of
the fact that most shipping lines, when asked if they
would contemplate switching feeder or relay volumes to
southern European ports, have replied in the negative
(see recital 41).

Conclusion on the relevant market

(47)

It is concluded that the relevant market to be considered
in this case is the market for the provision in northern
Europe of stevedoring services for transhipment traffic
carried by deep-sea container vessels.

B. COMPETITIVE ASSESSMENT

1. Current market structure

Throughput

(48) The year 1999 is the most recent for which complete
transhipment throughput data are available. OSC esti-
mates that Hutchison and ECT had a combined share of
[around 50 %]* of the northern European transhipment
market in that year (48):

(46) See, inter alia, North European containerisation, page 23.
(47) North European containerisation, page 176.
(48) OSC Briefing paper, page 13.

5.9.2003

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TABLE 1

Operator

Deep-sea

Transhipment

Total

(in TEU)

Hutchison — Felixstowe

Hutchison — Thamesport

ECT — Rotterdam

Hutchison and ECT

HHLA — Hamburg

Hessenatie — Antwerp and Zeebrugge

Eurogate — Bremerhaven and Hamburg

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[> 2 000 000]*

[...]*

[< 500 000]*

[...]*

[> 4 000 000]*

[...]*

[> 7 000 000]*

[...]*

[> 2 000 000]*

[...]*

[> 2 000 000]*

[...]*

[> 2 700 000]*

North Europe — Total

[> 14 000 000]*

[< 5 000 000]*

19 486 000

Hutchison — Felixstowe

Hutchison — Thamesport

ECT — Rotterdam

Hutchison and ECT

HHLA — Hamburg

Hessenatie — Antwerp and Zeebrugge

Eurogate — Bremerhaven and Hamburg

North Europe — Total

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

100

(in %)

[> 10]*

[< 5]*

[> 20]*

[30-40]*

[> 10]*

[> 10]*

[> 10]*

100

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

100

(49)

It is apparent from Table 1 that each of the closest
competitors had less than half the market share of
Hutchison and ECT (HHLA: [between 15 % and 25 %]*;
Eurogate: [between 15 % and 25 %]*). The Commission’s
investigation has moreover shown that ECT throughput
was understated by OSC (49). Once this correction has
been made, the market share of Hutchison/ECT increases
[slightly]* (50).

(50)

It is clear that the post-merger market is highly concen-
trated: the market would have a Herfindahl-Hirschman
Index (HHI) of 3 079 (51). The operation has led to an
increase in HHI of 1 129 (52) The combined Hutchison
and ECT share of the transhipment market has remained
stable in recent years: OSC estimates that the parties’
combined market share was [below 50 %]* in 1997. The
fragmentation of competition (the closest competitor to

( 49) [Throughput estimates by OSC]*.
( 50) [Calculation of the increase]*.

(51) A post-merger HHI above 1 800 is regarded as evidence of a
highly concentrated market (see American Department of Justice
merger guidelines — 1992 version).

(52) [Calculation of the HHI]*.

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Hutchison/ECT in 1997 had a transhipment share of
approximately [under 20 %]* was also a feature of the
market in 1997.

(51) OSC has also provided a breakdown of transhipment

throughput by major port in 1999 (53) and 1997 (54):

(52) Table 2 provides an indication of the strong position of
Rotterdam and Felixstowe as preferred transhipment
ports. The only real challenge to that position in 1999
came from Hamburg, the transhipment throughput of
which amounted to approximately half that of Rotterd-
am and Felixstowe combined.

TABLE 2

1999

Transhipment

(in TEU)

Felixstowe

Thamesport

Southampton

Le Havre

Zeebrugge

Antwerp

Rotterdam — ECT

Rotterdam — Other

Bremen/Bremerhaven

Hamburg

Gothenburg

Others

1997

Felixstowe

Thamesport

Southampton

Le Havre

Zeebrugge

Antwerp

Rotterdam

Bremen/Bremerhaven

Hamburg

Gothenburg

Others

[> 800 000]*

[< 80 000]*

[< 80 000]*

[< 250 000]*

[< 50 000]*

[< 600 000]*

[> 1 500 000]*

[< 80 000]*

[> 500 000]*

[> 1 000 000]*

[< 30 000]*

[> 50 000]*

Total

5 436 000

[< 800 000]*

[< 50 000]*

[> 60 000]*

[> 100 000]*

[< 50 000]*

[> 200 000]*

[> 1 000 000]*

[> 200 000]*

[> 1 000 000]*

[< 30 000]*

[> 50 000]*

Total

3 878 100*

( 53) Figures for 1999 adjusted for information provided by terminal

operator/port authority.

( 54) Briefing paper, page 11.

(53) Moreover, table 2 provides an additional illustration of
the degree of concentration prevailing in the tranship-
(Rotterdam, Hamburg,
ment market:
Felixstowe, Antwerp and Bremerhaven) accounted for
91 % of all transhipment throughput in northern Europe
in 1999 (55).

five ports

(54) The parties have argued that the importance of the
transhipment market is inflated, in absolute terms and
relative to hinterland traffic, by the fact
that each
transhipment container is ‘double-counted’ in port and
terminal statistics. Third parties reject this view: each
transhipment container generates two quayside moves
and each move generates revenue, albeit, as a rule, at a
discounted rate. Further, each move ‘consumes’ terminal
capacity. The ‘double-counting’ therefore provides an
indication of the importance of transhipment traffic to
terminal operators in respect both of revenue and of
capacity. The Commission has verified in the course of
its in-depth investigation that the statistics provided by
terminal operators count each transhipment container
as two moves and each hinterland container as one
move.

(55) The parties have also argued that the 1999 throughput
figures should be adjusted to take account of the ‘loss’
by ECT of two major customers: Maersk Sealand and
P & O Nedlloyd. Maersk Benelux BV and ECT have
entered into a joint venture (Maersk Delta BV) to provide
a dedicated terminal for the Maersk Sealand shipping
line. The terminal started operations in October 2000,
but will not reach full capacity until 2005 (56). P & O
Nedlloyd and ECT have signed a letter of intent to enter
into a similar joint venture (Euromax). Assuming that
the letter of intent will be followed by a formal joint
venture agreement, that joint venture is expected to start
operations in 2004.

(55) In this context it should be noted that the same five ports have a
share of ‘only’ 75 % of north European hinterland traffic. The
level of concentration with regard to transhipment is thus much
higher than the level of concentration with regard to hinterland.
It should further be noted that four ports (Rotterdam, Hamburg,
Felixstowe and Antwerp) accounted for approximately 81,5 % of
transhipment traffic, but ‘only’ 67 % of hinterland traffic [Source:
OSC ‘Briefing paper’, table 10].
(56) Source: Maersk Delta business plan.

5.9.2003

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Official Journal of the European Union

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(56)

In the Commission’s view, any attempt to adjust 1999
throughput figures to reflect events that may take place
after 1999 would be fundamentally flawed inasmuch as
it would take no account of other developments on the
market between 1999 and the date of the events in
question (57).

(57) An illustration of the difficulty of predicting the impact
on market share of the loss of a customer or customers
is provided by the parties themselves. In the statement
of defence, paragraph 182, the parties note that in the
year 2000 Genoa experienced an increase in tranship-
ment traffic of 21,6 % over 1999 figures, despite having
lost the traffic of the Mediterranean Shipping Company
(MSC) to La Spezia in 1999. In this context, it should be
noted that northern European transhipment traffic is
predicted to grow by some 135 % in the period up to
2012 (58). It is thus reasonably certain that the loss of
the traffic of a major customer will be offset by demand
from other customers.

(58)

In the statement of defence (pages 29 et seq.), the parties
present various statistics for the year 2000 which
purport to show that the combined market share of
Hutchison/ECT has decreased since 1999. The Com-
mission has the following comments on those statistics.

(a)

The table on page 29 of the statement of defence
shows overall deep-sea container port demand in
northern Europe in 1999 and 2000. As the relevant
market has been defined by reference to tranship-
ment traffic, this table is of little value. In any event
the parties do not explain how the year 2000
figures have been obtained (59).

(b) The above comments also apply to the table on
page 30. According to the parties, this table shows
that ‘the combined market share of total deep-sea
container traffic of Hutchison/ECT has fallen from
[35 % to 40 %]* in 1999 to [25 % to 30 %]* by the
end of 2000, having excluded traffic transferred to
Maersk Delta’ (page 31, first paragraph). This, the
parties claim ‘represents a significant reduction in
the combined market share of Hutchison and ECT
during the period of only one year, which the
parties firmly believe that the Commission may not
than
ignore’.
1 000 000]* TEU are shown as having been trans-
ferred from ECT to Maersk Delta in the year 2000.
The available evidence (replies from Maersk and
ECT) shows that only [less than 75 000]* TEU were
handled by Maersk Delta in that year. The table is
therefore, at best, extremely misleading and does
not in any way support the conclusion that ‘the
combined market share of total deep-sea container
traffic of Hutchison/ECT has fallen from [35 % to
40 %]* in 1999 to [25 % to 30 %]* by the end of
2000’ (60).

[slightly more

In the

table,

(c)

Finally,
in tables on pages 32 and 33 of the
statement of defence, the parties attempt to show
that the combined transhipment market share of
Hutchison/ECT has declined from [above 50 %]* in
1999 to [30 % to 40 %]* in the year 2000. First, it
should be noted that the transhipment figures for
2000 — with the exception of the figures for
Felixstowe, Thamesport and ECT Rotterdam — do
not represent actual transhipment throughput in
the year 2000 (61). Secondly, the Commission notes
that these figures indicate that the parties’ combined
market share in the year 2000, before any adjust-
ment, was [just under 50 %]*. The parties have
argued that their combined 1999 market share was
[even further below 50 %]* (see page 33 of the
statement of defence, paragraph 110). On that
basis,
the parties’ combined market share has
increased by almost [1,5 % to 3 %]* since 1999.
Thirdly, the [30 % to 40 %]*combined market
share mentioned above is obtained by deducting
[125 000 to 175 000]* transhipment TEU swit-
ched from ECT to Bremerhaven in June 2000 and
[more than 500 000]* transhipment TEU switched
from ECT to Maersk Delta in 2000. In this respect,
the Commission notes that the parties have stated
that the ECT transhipment figure before adjustment

( 57) Overall growth or contraction of demand, new entrants (and
exits) on the upstream (terminal services) and downstream
(liner shipping) markets, restructuring of shipping alliances and
services, switches between terminals,
increase or decrease of
productivity at individual terminals, etc.
( 58) North European containerisation, page 185.
( 59) The source quoted is ‘Ocean Shipping Consultants’ January 2001.
That report (referred to in this document as the ‘Briefing paper’)
does not contain the figures in question. In the table, ECT is
shown as having handled [less than 4 000 000]* TEU in 2000
— this figure differs from that provided by Hutchison Whampoa
in its Annual Report 2000 (page 20), where ECT is said to have
handled [4 200 000 to 4 500 000]* TEU in 2000, i.e. an increase
of some [250 000 to 350 000]* TEU over 1999 throughput.

(60) It should first be noted that the table in paragraph 102 of the
statement of defence is mathematically flawed (different market
totals in columns 1 and 2). The actual transfer of [less than
75 000]* TEU is already taken into account in the year 2000
actual throughput figure for ECT — there is thus no need for any
further correction to that figure.

(61) The parties’

‘figures’ have been obtained by increasing the 1999
actual throughput of the respective ports by 6 % (estimated
annual increase of demand in northern Europe). There is no
independent confirmation (for example, port statistics, market
studies, information from port or terminal operators) of these
‘figures’.

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the

represents

[>1 500 000]* TEU (62)
actual
throughput of that terminal in 2000. That being
the case, there should be no need for any further
adjustment to take account of switches of traffic
from or to ECT in that same year (2000). The
Commission also notes that Maersk Delta did not
handle [more than 500 000]* transhipment TEU
in the year 2000 — the correct figure is [less than
10 000]* TEU (63).

(62) The parties’ share in the same year (2000) of total
scheduled weekly calls in northern Europe by the major
transatlantic services was [around 30 %]*. Bremerhaven
and Le Havre accounted for [less than 20 %]* each, and
Antwerp for [around 15 %].

Capacity

(59) Notwithstanding the above comments, the fact that two
major customers have taken, or will take, a participation
in a joint venture terminal in Rotterdam is an element
that may be relevant for an assessment of the concen-
tration’s future position on the market and is therefore
examined below (paragraphs 68 et seq.; 86 et seq.).

(63) Terminal and port capacity statistics do not distinguish
between ‘hinterland’ capacity and ‘transhipment’ ca-
pacity. These statistics can therefore provide — at best
— only a very imperfect indication of
the parties’
current position and possible future position on the
transhipment market.

Share of port calls

(60) The above figures and tables (see tables 1 and 2) reflect
the market position of the concentration in terms of
throughput in 1999. Another indication of the parties’
market strength is provided by their high share of port
calls by the major liner services on the northern Europe
— Far East and transatlantic trades. These trades together
are estimated to account for almost three quarters of
total northern European container trade. It should also
be noted that services on the Europe-Far East trades also
deploy the newest and largest vessels (see further below,
paragraphs 97 et seq., regarding the impact of larger
vessels) (64).

(61) According to Drewry (65), Hutchison/ECT (Felixstowe,
Thamesport, ECT Rotterdam) accounted for [less than
40 %]* of total scheduled weekly calls by the major
carriers on the north Europe-Far East trade in 2000.
Hamburg accounted for [less than 20 %]*, Le Havre for
[close to 10 %]* and Antwerp for [less than 10 %]*.

(64) As mentioned in the decision of 1 March 2001 (re-
cital 64), Drewry and OSC have each made separate, and
differing, estimates of
the amount and structure of
current northern European deep-sea capacity. Drewry
estimates that Hutchison/ECT had a combined share of
[around 30 %]* of overall north European deep-sea
port capacity in 1999. OSC estimates that the parties
accounted for [less than 30 %]* of overall north
European deep-sea port capacity in the year 2000 (66).

(65) There are significant differences between the two esti-
mates, which are not fully explained by the fact that they
cover different years. Estimating capacity is a complex
exercise, inasmuch as it involves the weighing of several
factors, such as berth lengths, number of cranes, stacking
areas, workforce productivity, in order to arrive at an
overall conclusion as to effective capacity. This in turn
must be distinguished from latent capacity, which is an
estimate of potential capacity, assuming a specific, not
yet attained, level of productivity.

(66) At the Commission’s request, the parties have attempted
a reconciliation between the Drewry and OSC estimates.
On the basis of this reconciliation, supplemented by
information obtained directly from port authorities and
terminal operators, the Commission has made its own
estimate of capacity and capacity shares in the year 2000.
These are set out in table 3.

( 62) That is to say, an increase in transhipment

throughput of
[around 25 000]* TEU over 1999 figures, despite the switch of
[250 000 to 350 000]* TEU to Bremerhaven in 2000.

( 63) Source: A. P. Møller (reply to Commission’s request for infor-

mation).

( 64) North European containerisation, page 207.
( 65) European container port market data, page 6.

(66) For competitors’ shares see table 3.

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TABLE 3

Port

Capacity 2000

%

Capacity 2000
adjusted

(in TEU)

%

Felixstowe

Thamesport

Southampton

Le Havre

Zeebrugge

Antwerp

[...]*

[> 10]*

[...]*

[> 10]*

[...]*

[< 5]*

[...]*

[< 5]*

[...]*

[< 6]*

[...]*

[< 6]*

[...]*

[< 12]*

[...]*

[< 12]*

[...]*

[< 8]*

[...]*

[< 8]*

[...]*

[> 10]*

[...]*

[> 10]*

Rotterdam — ECT

[...]*

[< 22]*

[...]*

[< 22]*

Rotterdam — Other

[...]*

[< 5]*

[...]*

[< 5]*

Bremerhaven

Hamburg (a)

Gothenburg (a)

Amsterdam (a)

[...]*

[< 13]*

[...]*

[< 10]*

[...]*

[< 20]*

[...]*

[< 20]*

[...]*

[< 5]*

[...]*

[< 5]*

[...]*

[< 2]*

[...]*

[< 2]*

(a) Provided by the port authorities in Hamburg, Gothenburg and Amsterdam, respectively.

Total

27 160 000

100

26 816 200

100

(67) As table 3 shows, Hutchison/ECT had a combined
capacity share of [30 % to 35 %]* in the year 2000,
roughly equivalent
to its share of capacity in the
year 1997 ([30 % to 35 %]*). Hamburg and Antwerp
had shares of [less than 20 % each]* and [10 % to 15 %]*
respectively while Le Havre and Bremerhaven accounted
for [less than 10 % each]*.

representation on the Board of Directors, although the
Maersk-appointed chairman has the casting vote in
event of deadlock. The terminal became operational in
October 2000 and will, during a phasing in period
expected to continue until 2005, gradually absorb
Maersk Sealand volumes currently handled by ECT. The
joint venture will not be able to accommodate third
parties before 2007 (67).

(68) Allowance has been made in table 3 for the specific
circumstances of the Maersk Delta BV terminal (Rotter-
dam) and North Sea terminal (Bremerhaven).

(69) Maersk Delta BV is a joint venture between Maersk
(66,66 %) and ECT (33,33 %), the main purpose of
which is to provide a dedicated deep-sea container
terminal in Rotterdam for the Maersk Sealand shipping
line. Despite having only a minority stake in Maersk
Delta, ECT has certain veto rights in respect of, inter alia,
It also has equal
the joint venture’s pricing policy.

(70) The North Sea terminal

is a joint venture between
Maersk (50 %) and Eurogate (50 %), the main purpose
of which is to provide a dedicated terminal
in Bre-
merhaven for Maersk Sealand. Unlike the Maersk Delta
terminal, the North Sea Terminal also provides services
to third parties (these volumes accounted for [above
10 %]* of the overall throughput of the terminal in the
year 2000).

(67) It is precluded from doing so by agreement between the joint

venture partners.

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(71)

(72)

In general, where integration exists between supplier
and purchaser (intra-group supplies), the production in
question (‘captive production’) should not be included
in the relevant market for the purpose of assessing
market shares. If captive production can be switched to
non-captive production within the short-to-medium
term,
it may constitute potential competition. In the
instant case, it is necessary to examine the actual and
potential use of each terminal solely or jointly owned or
controlled by individual shipping lines in order to
determine the proportion of terminal production and
capacity which should be regarded as captive.

terminal

(approximately

In table 3, capacity in the year 2000 relating to the
Maersk Delta
[below
1 000 000]* TEU) has been apportioned between the
owners, Maersk and ECT, in relation to their respective
shareholdings (Maersk: 66,6 %; ECT: 33,3 %). This
allocation reflects the fact that although ECT has a
minority shareholding it has joint control (68) through
veto rights in respect, inter alia, of pricing and a non-
compete clause which ensures that Maersk Delta cannot
compete with ECT for third part business before the
year 2007. The Maersk portion ([...]* TEU) should be
regarded as captive capacity, on the basis that the
terminal will be dedicated exclusively to Maersk Sealand
until 2007. It should therefore be excluded in table 3
both from the ECT market share and from total
throughput. The ECT portion ([...]* TEU), which does
not constitute captive capacity for ECT, has been added
to ECT capacity.

(73) The year 2000 capacity of the North Sea terminal

in
Bremerhaven ([1 200 000 to 1 600 000]* TEU), which
is jointly owned by Maersk (50 %) and Eurogate (50 %),
has been apportioned between the joint venture partners
in accordance with the breakdown of throughput in
1999.

(74) Of the throughput handled by the North Sea terminal in
1999 ([more than 1 000 000]* TEU), [less than 90 %]*
was accounted for by Maersk Sealand volumes, while
the remainder [...]* represented third party volumes. It
follows that [slightly less than half the throughput]*
represented captive Maersk production which should
not be included in the market. The remainder, [...]*, is
third-party production (for Maersk and Eurogate) which
should be included in the market.

( 68) Although the parties have argued that ECT does not have joint
control,
the joint venture agreement unequivocally requires
unanimous approval of any changes to the jointly agreed pricing
policy set out in the agreement. This pricing policy applies to the
provision of services to the Maersk Sealand shipping line, i.e. the
only services that will be provided by Maersk Delta BV until
2007. ECT’s control through this veto right is reinforced by a
non-compete clause which explicitly prohibits Maersk Delta
from competing with ECT for third-party business. Joint control
is also assured by veto rights over major investments and
acquisitions — these veto rights go beyond that which is required
to safeguard basic shareholder rights (which are in any event
protected by a specific provision in the joint venture agreement).

(75) Accordingly, [less than half]*, of the capacity of the
North Sea terminal has been excluded in table 3. The
[remainder is]* included in the overall capacity ([of more
than 2 300 000]* TEU of Bremerhaven.

(76) The parties have argued that in the instant case captive
production and capacity should be included in the
market because it:
(a) provides indirect competition
through its benchmarking effect on prices; and (b) rep-
resents potential competition.

(77) With regard to (a) the Commission considers it unlikely
that the prices set for captive production (internal sales)
could have a benchmarking effect, inasmuch as they are
unlikely to be transparent and given that
in-house
pricing follows other principles than market pricing,
that is to say, generally lower prices are set for in-house
sales (69). It follows that even if competitors were in the
unlikely position of being able to obtain information
about the in-house prices they could not readily deter-
mine the market prices the captive producer would have
to ask. With regard to terminals with captive production,
the benchmarking effect, if any, would be extremely
limited, especially in a case of a captive producer which
does not have sufficient capacity available to cater for
third party needs.

(78)

In respect of (b) the Commission takes the view that in
the case of the North Sea terminal conversion of captive
production to third-party production in response to a
price increase at terminals controlled by Hutchison/
ECT is unlikely to occur to any significant extent.
Bremerhaven is one of Maersk Sealand’s main hub ports.
To displace Maersk Sealand volumes from that port to
other ports — assuming that this would be feasible —
in order to make available further capacity at the North
Sea Terminal for third parties would cause Maersk
serious inconvenience and cost to its liner shipping
operations. This inconvenience and cost is likely to
outweigh any benefit Maersk might derive from in-
creased revenue from the provision of services to third
parties. Nor is there any evidence that the capacity of
the North Sea terminal could be expanded at short
notice in order to meet increased demand from third
parties.

(79) The Maersk Delta terminal is of course precluded from
providing services to third parties within the timeframe
under consideration (period up to and including
2005) (70), so the issue of potential competition does
not arise. Further, ECT has joint control over the terminal
through its representation on the Board and its veto
rights. It is therefore clear, in the Commission’s view,
that the Maersk Delta terminal could not under any
circumstances be regarded as a competitor of ECT, even
if the terminal’s production were to be regarded as non-

(69) It is common practice within corporate groups to invoice internal
services at cost price with no, or only an insignificant, mark-up.
(70) The Commission has taken the year 2005 as the cut-off date for
taking account of developments in the market. Developments
beyond that date are generally too uncertain to be relied on in
the present assessment.

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captive. The Euromax terminal, to which the parties
refer, will not become operational before 2004 and will
in any event be jointly controlled by ECT and can for
that reason not be regarded as a (potential) competitor
of ECT.

case there is no vertical integration (captive production),
in the latter case there is. Third parties generally confuse
the two types of facility, referring to both as ‘dedicated
facilities’. The former should of course be included in
the market (output on the market), the latter should not
(internal output).

(80) The notifying parties have interpreted comments from
third parties as offering support for the proposition that
all shipping line owned or controlled capacity and
production should be included in the market. In this
respect, a distinction should be made between facilities
dedicated to a particular shipping line but owned and
operated by a terminal operator and dedicated facilities
partly or wholly owned by a shipping line. In the former

(81) The parties have argued that

in the alternative all
capacity relating to terminals jointly owned by shipping
lines should be excluded from the market. Accordingly,
Table 4 includes neither capacity relating to the Maersk
Delta terminal ([less than 1 000 000]* TEU) nor [less
than 90 %]* (the throughput accounted for by the
Maersk Sealand shipping line) of the North Sea Terminal
capacity:

TABLE 4

Port

Capacity 2000

%

Capacity 2000
adjusted

(in TEU)

%

Felixstowe

Thamesport

Southampton

Le Havre

Zeebrugge

Antwerp

[...]*

[> 10]*

[...]*

[> 10]*

[...]*

[< 5]*

[...]*

[< 5]*

[...]*

[< 6]*

[...]*

[< 6]*

[...]*

[< 12]*

[...]*

[< 12]*

[...]*

[< 8]*

[...]*

[< 8]*

[...]*

[< 15]*

[...]*

[< 15]*

Rotterdam — ECT

[...]* (71)

[< 22]*

[...]*

[< 22]*

Rotterdam — Other

[...]*

[< 5]*

[...]*

[< 5]*

Bremerhaven

Hamburg (a)

Gothenburg (a)

Amsterdam (a)

[...]*

[< 13]*

[...]* (72)

[< 8]*

[...]*

[< 20]*

[...]*

[< 20]*

[...]*

[< 5]*

[...]*

[< 5]*

[...]*

[< 2]*

[...]*

[< 2]*

(a) Information provided by port authorities.

Total

27 160 000

100

25 936 400

100

( 71)

( 72)

Figure drawn from the OSC/Drewry reconciliation submitted
by the parties. This figure does not include any capacity relating
to the Maersk Delta terminal so no further adjstment to exclude
Maersk Delta capacity is necessary.
[Details regarding the North Sea terminal].

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(82) As can be seen from table 4, the exclusion from the
market (ports of Rotterdam and Bremerhaven) of the
capacity of the terminals in which Maersk has a partici-
pation and presence has no significant effect on the
concentration’s share of capacity (increase [of less than
1 %]*).

and thus represents a capacity addition (73). The terminal
is primarily intended to serve P & O Nedlloyd and its
partners, but will also provide services to third parties as
and when spare capacity arises. The terminal is expected
to start operations in 2004, with P & O Nedlloyd volumes
being gradually transferred from other terminals.

Conclusion

(83) It can be concluded from the above analysis of the current
market structure that the concentration will lead to the
creation of a dominant position on the relevant market.
In reaching this conclusion, particular importance has
been attached to the following factors:

(a)

(b)

(c)

(d)

the current high combined market share of Hutchi-
son and ECT on the relevant market, in conjunction
with the relatively low market share of the closest
competitor;

the fact that the high combined market share of
Hutchison/ECT has remained stable over time;

the concentration of transhipment traffic to only
five ports in northern Europe, two of which are
controlled by the parties;

the parties’ high combined share of port calls by the
major liner services on the northern Europe-Far East
and transatlantic trades.

2.

Future developments

Capacity developments

(84) The parties argue that the Hutchison/ECT share of overall
North European deep-sea port capacity will fall drastically
in the period up to 2005 as a result of several factors.

(85) The first of these factors has been mentioned above (see
recital 69). The Maersk Delta terminal will progressively
take over land areas and infrastructure which are either
currently used or were intended to be used by ECT. ECT’s
scope for physical expansion of capacity within the
current limits of the Port of Rotterdam will be restricted
as a consequence. The terminal will be dedicated exclus-
ively to Maersk Sealand until the beginning of 2007.

(86) Further, ECT and P & O Nedlloyd have signed a letter of
in
intent to establish a 50/50 joint venture terminal
Rotterdam, Euromax. Unlike the Maersk Delta terminal,
the Euromax terminal will be established on ‘virgin’ land,

(87) The Maersk Delta terminal represents third party business
for ECT and captive production for Maersk. A non-
compete clause prevents it from competing with ECT. A
decision to depart from the jointly agreed pricing guide-
lines for the provision of stevedoring services to Maersk
Sealand vessels requires the approval of both parties to
the joint venture. It follows that existing capacity and
capacity additions at that terminal must be split in such a
way as to reflect that situation. The same applies to the
Euromax terminal. With regard to the latter terminal, the
situation is complicated by the fact that the terminal will,
in principle, be open to third parties. However, bearing in
mind that the terminal will start operations in 2004 and
will require a phasing-in period, during which the transfer
of P & O Nedlloyd volumes will have precedence, the
Commission considers it unlikely that significant third
party volumes will be handled by Euromax before the end
of 2005 (74). Moreover, even if significant third-party
volumes were to be handled by Euromax during the
period under consideration, that terminal — over which
ECT would have joint control — could not in any sense
be regarded as a competitor of Hutchison/ECT.

(88) The second of the factors liable, in the parties’ view (see
paragraph 80 et seq. of the statement of defence), to have
an impact on the Hutchison/ECT share of capacity in the
period leading up to 2005, is the capacity additions being
planned both at other existing deep-sea terminals and at
new locations. OSC expects these developments to lead to
an increase in overall North European deep-sea terminal
capacity from 32,25 million TEU in the year 2000 to
46,75 million TEU in 2005. The Hutchison/ECT share of
that capacity (2005) is projected to be [above 20 %]*, or
[more than 10]* million TEU. This estimate excludes
from the parties’ share not only capacity relating to
Maersk Delta but also capacity attributable to Euromax.

(89) Table 5 shows the estimate of capacity and capacity
shares in the year 2005, on the basis of
the OSC
data, updated by information obtained directly from the
notifying parties and third parties. In the second column,
the captive production of the Maersk Delta, Euromax,
North Sea and MSC (Antwerp) terminals has been ex-
cluded from the market:

(73) Carel van den Driest (ECT CEO), quoted in P & O Nedlloyd press
release of 14 November 2000: ‘In addition Euromax will ensure
room for growth for current and new customers at the [ECT]
Delta Terminal for many years to come.’

(74) The Maersk Delta terminal will require a five-year phasing-in
period; it is reasonable to assume a similar phasing-in period for
Euromax.

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Felixstowe + Thamesport + Harwich

Southampton

Le Havre

Zeebrugge

Antwerp

Rotterdam — ECT

Rotterdam — Other

Bremerhaven

Hamburg

Gothenburg

Amsterdam

Aarhus

Vlissingen

Shellhaven

Other

TABLE 5

Capacity 2005

%

(in TEU)

Capacity 2005
adjusted

[...]*

[...]*

[...]*

[...]*

[9-13]*

[2-5]*

[5-7]*

[3-5]*

[...]* (76)

[9-14]*

[...]*

[...]*

[9-18]*

[4-12]*

[...]* (80)

[5-10]*

[...]* (82)

[14-19]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

Total

43 154 000

[3-5]*

[4-6]*

[0,5-2]*

[2-4]*

[0,5-1,5]*

[1-2]*

100

[...]*

[...]*

[...]* (75)

[...]*

[...]* (77)

[...]* (78)

[...]* (79)

[...]* (81)

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

39 778 166

JV between MSC and Le Havre on a 50/50 basis [...]*.

( 75)
( 76) Referring to the parties’ arguments in their statement of
defence (paragraph 94 and the footnotes contained therein) the
following should be noted: the Annex to the answer provided
by the Port Authority of Antwerp (pages 2260-2262 of the file)
shows the expansion plans. As it is clear from the cover letter
and the Annex, only the first two phases are under construction
and can reasonably be expected to be completed by 2005. For
the third phase of Deurganckdock east and west, construction
has not yet been ordered (page 2262). It is also clear from the
answer provided by the Antwerp Port Authority that the
original timing is no longer realistic, as the Parliament has
suspended the expansion plans (see answer 4 on page 2261).
Taking the above into consideration, one can add the capacity
additions resulting from the first and second phase expansions
at Deurganckdock east and west to the capacity of 2000 [...]*.
[...]*.
[...]*.
[...]*.
[...]*.
[...]*.
Information provided by the Port Authority.

( 77)
( 78)
( 79)
( 80)
( 81)
( 82)

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(90) Table 5 suggests that the Hutchison/ECT share of overall
capacity may be expected to decline from the present
level of [above 30 %]* to [below 30 %]* in 2005. It
should be noted that this figure is likely to be significantly
understated, as both Southampton (P & O Ports) and
Aarhus (Maersk Ports) are likely to have significant captive
throughput (83). The exclusion of this captive throughput
from the market would have the effect of increasing the
capacity share of Hutchison/ECT.

(91) It should also be noted that this projection appears to
assume that the levels of productivity at the ECT terminals
will not increase significantly over the period in question.
Given the levels of productivity already achieved at other
Hutchison terminals (84), this assumption is open to
challenge. The parties’ capacity share must moreover be
compared with that of the closest competitors: In the
year 2000 the closest competitor had a capacity share of
[10 % to 15 %]*; in 2005 that share is projected to be
[still within that range]* (85).

(92) Moreover, capacity alone is a poor indicator of tranship-
ment market share (see recital 63) and it cannot be
assumed that all new capacity will attract commensurate
throughput. The example of Zeebrugge indicates that
even for a port possessing substantial competitive assets
such as low handling charges, good water depth and a
good location in relation to the shipping lanes, it may be
difficult to attract volumes when faced with competition
from established major ports (86). Most new facilities will
also require a phasing in period, which may cover several
years (87).

(93) Table 6 indicates what the situation would be in 2005 if,
as the parties have argued in the alternative, all capacity
relating to terminals jointly owned by shipping lines were
to be excluded from the market:

TABLE 6

Capacity 2005

%

(in TEU)

Capacity 2005
adjusted

[...]*

[...]*

[...]*

[...]*

[...]*

[9-15]*

[3-6]*

[5-8]*

[3-6]*

[...]*

[...]*

[...]* (88)

[...]*

[8-13]*

[...]* (89)

Felixstowe + Thamesport + Harwich

Southampton

Le Havre

Zeebrugge

Antwerp

Rotterdam — ECT

[...]*

[10-16]*

[...]*

( 83) The main container terminal in Southhampton is jointly owned
by P & O Ports. Southampton is also one of the main hubs of
the P & O Nedlloyd shipping line. A significant proportion of the
throughput of Southampton is therefore likely to constitute
captive production (provision of services by P & O Ports to P & O
Nedlloyd). The same applies for Aarhus, which is controlled by
A. P. Møller (Maersk) and is one of the main European hubs of
the Maersk Sealand shipping line.

( 84) See recital 103.
( 85) Briefing paper, table 14: Hessenatie is forecast to have a [10 % to
15 %]* share of capacity in 2005 (NB: this figure includes captive
capacity relating to the Hessenatie/MSC joint venture — the
figure is thus overstated).

( 86) North European containerisation, page 55: ‘...demand growth has

been disappointing’.

( 87) The business plan for the Maersk Delta joint venture envisages a

five-year phasing in period.
( 88) MSC capacity excluded [...]*.
( 89) Total JV Hessenatie/MSC capacity excluded [...]*.

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Rotterdam — Other

Bremerhaven

Hamburg

Gothenburg

Amsterdam

Aarhus

Vlissingen

Shellhaven

Other

Capacity 2005

%

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[0,5-13]*

[2,5-10]*

[14-22]*

[3-6]*

[4,5-7,5]*

[0,5-3,5]*

[2-5]*

[0,3-1,2]*

[0,7-3,5]*

(in TEU)

Capacity 2005
adjusted

[...]* (90)

[...]* (91)

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

Total

43 154 000

100

33 454 000

(94) This exercise leads to an insignificant increase in the

parties’ share of future capacity [of under 1 %]*.

Switch of traffic

(95) The parties have argued that new developments, such as
Flushing (Vlissingen) (92), can be expected to offer strong
price competition to established facilities, as the new
facilities will have an incentive to price at marginal cost
in order rapidly to grow the volumes needed to achieve
breakeven (see, inter alia, paragraphs 84 and 95 of the
statement of defence). However, the strategy of pricing
below average total cost is not one that can be sustained
indefinitely. Furthermore, such a strategy invites a match-
ing response from the incumbent operators. The incum-
bent operators will generally be in better position to
endure a protracted price war than the new operators,
having had a longer period in which to amortise invest-
In the specific case of
ments and pay back loans.
Hutchison/ECT, it should also be noted that the concen-
tration has the backing of the financially strong Hutchison
Whampoa Group.

( 90) Maersk Delta and Euromax capacity excluded [...]*.
( 91) Capacity at North Sea Terminal excluded (Maersk and Euro-

gate][...]*.

( 92) With regard to developments at Vlissingen, the Commission
notes the following information in the 1999 annual report of
RMPM (page 13): ‘Plans are being made in Flushing (Vlissingen)
for the construction of the Westerschelde Container Terminal.
The intended operator is the Belgian company Hessenatie. If the
plans go ahead, construction and operation of the infrastructure
will probably be executed on the instruction of Exploitatiemaats-
chappij Schelde Maas (ESM). Zealand Seaports and the RMPM
each have a 50 percent stake in ESM’ (emphasis added).

(96) At paragraphs 112 et seq. of the statement of defence, the
parties claim that MSC will switch all of its current
transhipment traffic at Felixstowe ([...]* TEU) away from
that port. This has not been confirmed by MSC, which
states that it has switched [about one fifth]* TEU from
Felixstowe, but has left about [four fifths]* TEU overall at
that port (93).

The impact of large vessels

In 1999,

(97) The largest container vessel delivered in 1988 had a
the largest vessel
capacity of 4 340 TEU.
delivered had an estimated capacity of 7 500 TEUs (94).
OSC estimated that the typical vessel deployed on the Far
East trades in 2005 will have a capacity of 5 500 to
6 500 TEUs. The largest vessel on those trades will have
a capacity of 8 500 TEUs (95). A typical vessel on the
transatlantic in 2005 will be able to carry 4 000 TEUs,
while the largest vessel will be able to carry 4 800 TEUs.

(93) See MSC reply, page 2326 of the file.
(94) North European containerisation, page 209.
(95) It may be useful to contrast these more recent estimates with an
earlier report (‘The competitive position of Felixstowe versus
Rotterdam terminals’, September 1998) in which OSC predicted
that a typical Far East vessel in 2010 would have a 6 500 TEU
capacity, while the largest vessel would be of 8 000 TEU size.

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(98)

Scheduled deliveries for the period April to Decemb-
er 2001 include three container vessels in the 4 000 to
4 999 TEU range, 24 in the 5 000 to 5 999 range, 19 in
the 6 000 to 6 999 range, one in the 7 000 to 7 999 ran-
ge, and one in the 9 000 to 10 000 TEU range (96). In
January 2001, Maersk Sealand took delivery of the 21st
of a series of 25 6 600 TEU/104 000 DWT container
vessels, while P & O Nedlloyd took delivery of the first
in a series of four 6 788 TEU vessels (97). Hapag-Lloyd
has four 7 200 TEU vessels on order (98). 6 000 + TEU
vessels accounted for some 27,5 % of all existing and
ordered cellular capacity as of June 2000.

(99) Vessels of the latest, now well established, generation of
large container vessels (6 400 metres to 7 500 TEU)
length of between 300 metres and
have an overall
320 metres, a beam of 42,8 metres and a draught of
between 14,2 and 14,5 metres (99). The next generation,
expected to be deployed between 2003 and 2008, is
predicted to have a capacity of between 8 000 and
8 500 TEU, an overall length of between 330 metres
and 340 metres, a beam of 46 metres to 47 metres and
a design draught of 14,5 metres. It should be noted that
the latest generation Maersk Sealand vessels, although
officially rated at 6 600 TEU, are believed to have a
capacity of approximately 8 000 TEU (100).

(100) Studies (101) and third party comments indicate that the
advent of larger container vessels will have a significant
impact on the pattern of vessel calls at North European
deep-sea container ports by leading to a further concen-
tration in port calls (102) and a concomitant increase in
transhipment and relay operations (103). In order to be
competitive, the major transhipment hubs will need to
provide:

— efficient container terminal services,

— direct deep-sea access (104),

(96) DynaLiners 13/2001, 30 March, page 5.
(97) Containerisation International, March 2001, page 27.
(98) North European containerisation, page 207.
(99) North European containerisation, page 210.
( 100) See, inter alia, Lloyd’s List of 3 April 2001, page 18.
( 101) For example North European containerisation, page 213, Trinity III
Extension Development, pages 21 et seq. (a report prepared by
OSC for Hutchison).

( 102) Significant concentration has already taken place in respect of
the Far East trades (on which the largest vessels are deployed):
in 1995 Felixstowe, Rotterdam and Hamburg accounted for
34 % of all calls in northern Europe by Europe-Asia liner
shipping services; by 1999 this proportion had increased to
61 %.

( 103) According to press reports (Lloyd’s List, 17 May 2001, page 5)
Lloyd’s Register and OSC both take the view that ultra large
container ships (ULCS) of 12 500 TEU capacity may well be
deployed by the middle of this decade. This deployment would
be driven by the significant cost savings that the ULCS are
expected to provide (up to 19 % over an 8 000 TEU vessel). It
should be noted that these cost savings are predicated on a
reduction in the number of port calls (as compared, presumably,
with the number of port calls currently made by the average
8 000 TEU vessel).

( 104) See, inter alia, North European containerisation, pages 206 and

— berth depths of at least 15 metres, accompanied by
depths in access channels of around 16 metres on
an acceptable tidal window,

— good hinterland connections (including intermodal

services).

(101) With regard to the criterion of efficiency, the results of
OSC’s survey of productivity levels at north European
ports in 1999 are set out in table 7:

TABLE 7

Terminal

TEUs/
Gantry

TEUs/
Hectare

Le Havre — Port Total

60 700

7 000

Zeebrugge — Flanders CT

46 700

5 600

Zeebrugge — Ocean CT

52 300

7 800

TEUs/
Berth
metre

278

136

182

Antwerp — Hessenatie River
Scheldt

127 200 14 600

708

Antwerp — Noord Natie
River Scheldt

74 500

6 100

Rotterdam — ECT Delta

119 600 15 500

Rotterdam — ECT Home

80 900 12 900

Rotterdam — Uniport

56 300 11 300

Rotterdam — Hanno

75 000 13 600

Bremerhaven — Eurogate

75 400

7 800

Hamburg — HHLA

98 000 12 800

Hamburg — Eurogate

72 900 11 800

374

918

571

281

200

387

650

461

Felixstowe

Southampton

117 000 19 700

1 064

76 900 13 600

683

(102) Table 7 shows that Felixstowe and ECT (Delta) ranked
amongst the most productive terminals in Europe in
1999. It also shows that there is a considerable gap
between the levels of productivity achieved by the
leading terminals (Felixstowe, ECT Delta and Antwerp-
Hessenatie) and those in the second and third tiers.

(103) In its report on the Trinity III extension development
(page 20), OSC notes that another Hutchison-controlled
terminal, HIT, is a world leader in terms of productivity.
In the same report
(page 21), OSC considers that
Felixstowe and Thamesport are likely to be able to
increase productivity from current levels to 1 400 TEU/
metre in the not-too-distant future. OSC benchmark
projections for the year 2005 (105), foresee a benchmark
of 950 TEU/metre for terminals on the north Continent
and a United Kingdom benchmark of 1 150 TEU/metre.
These are only slightly higher than the levels that were

207.

(105) North European containerisation, page 222.

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achieved by Felixstowe and ECT Delta in 1999. This
leads to the conclusion that Hutchison/ECT’s terminals
are likely to maintain their lead in terms of productivity
over most of the other north European terminals for the
foreseeable future. The parties have argued (statement of
defence, paragraph 192) that they should not be penal-
ised by the fact that they may be more efficient than
other operators. This misrepresents the Commission’s
position: the Commission’s aim is to make an objective
assessment of how market shares will actually develop
(prospective analysis of market structure) — the fact
that estimates of future throughput may be understated
as a result of insufficient allowance for efficiency gains
is obviously relevant to that assessment.

(106) The parties have argued that the time penalty and
draught restrictions at Antwerp have not, in practice,
deterred the largest vessels from calling at the port and
cite as an example the call of the Maersk Sealand vessel
Knud Maersk (a ‘K-class’, 6 000 TEU (107), vessel) at the
port (see paragraph 90 of the statement of defence). It
suffices to note in this respect, that Maersk has chosen
not to call at Antwerp with its largest vessels (the
‘S-class’ vessels of 6 600 + TEU capacity, rumoured to
have an effective capacity of 8 000 TEU). A comparison
between the composition of the Maersk north Europe-
Asia service calling at Rotterdam (108) (AE1) and that
calling at Antwerp (AE2) is enlightening. The Rotterdam
service makes use of two S-class vessels and three
K-class vessels; the AE2 service uses two K-class vessels
and no S-class vessel.

(104) Five northern European ports — Rotterdam, Hamburg,
Felixstowe, Antwerp and Bremerhaven — accounted for
91 % of all northern European transhipment volumes in
1999. Of these five ports, two, Hamburg and Antwerp,
are river ports. OSC has the following comment on the
competitive situation of these ports:

‘For the port industry, the focus is primarily on vessel
draught and the depth of access channels and berths.
Since the early 1990s, major river ports such as Antwerp
and Hamburg have responded to these developments
by deepening access channels. This has provided a
temporary solution to these trends. However, there is
now little scope to further improve the position —
except at very high and prohibitive cost — and the net
effect has been increasing restrictions on the tidal access
window at major container terminals. When these
considerations are linked to other disadvantages of
accessing these ports — principally the time factor for
transiting the rivers — this has resulted in increasing
difficulties. Such factors have been cited by Maersk as
the major reason for leaving Hamburg in favour of the
deepsea coastal terminals at Bremerhaven, and other
similar developments are noted worldwide’ (106).

(105) The Port of Antwerp confirms that it is ‘prepared’ to
dredge access channels to a depth of 13 metres. Further
dredging would be a possibility on the basis of ‘further
insights’. No timetable appears to have been set for the
start of dredging operations.

( 106) North European containerisation, pages 206 to 208. See also
page 183, where OSC comments, regarding vital requirements
for transhipment hubs: ‘The entire economics of transhipment
are based upon scale economies for deep-sea vessels. It is thus
vital that these largest vessels can be berthed on any tide with
minimum disruption. Problems in this regard have handicapped
both Antwerp and Hamburg in recent years. These requirements
can only increase as very large vessels further consolidate market
share and the economics of ultra large container ships come to
the fore’.

(107) With regard to Hamburg, that port has traditionally had
a high market share of transhipment operations, despite
the time penalty and draught restrictions associated with
transiting the Elbe, because of its proximity to the
Scandinavian/Baltic markets. The emergence of new
deep-water capacity at Bremerhaven is however eroding
Hamburg’s market share. Maersk’s decision to base one
of its European hubs (the North Sea terminal
joint
venture) at Bremerhaven rather than at Hamburg is
significant in this respect.

(108) The table in Annex I shows the level of accessibility to
the main north European deep-sea ports, assuming that
planned dredging programmes are carried out. The table
indicates that for a vessel of 14-metre draught (vessels of
approximately 6 000 TEU capacity), only Bremerhaven
(after dredging), ECT Delta and Le Havre offer unrestric-
ted access. Le Havre, although offering sufficient depth,
is handicapped by low productivity and poor reliability.

(109) The table in Annex I also shows that Felixstowe would
be one of the few ports able to offer access on an
acceptable tidal window.

(110) If the vessel draught is increased to 15 metres (most
6 000 + TEU vessels have a 14,5-metre draught), only
ECT Delta and Le Havre are able to offer unrestricted
access, with Felixstowe among those able to offer access
greater than 50 %.

(107) Official rating; the parties contend that the actual capacity is

considerably greater.

(108) The other North European ports called at by AE1 are Felixstowe

and Bremerhaven.

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(111) With regard to hinterland connections, OSC notes
that:
‘... the number of intermodal rail shuttles from
Rotterdam has mushroomed ...’ and that ‘[t]he location
of Rotterdam in relation to the waterway system is
perfect’ (109). It is no coincidence that Maersk and P & O
Nedlloyd have both chosen Rotterdam to be one of their
European hub ports and that both parties have invested
heavily in intermodal services on that basis (110).

(112) The parties argue (111) that the relative strength of a port
operator in respect of hinterland traffic has no impact
on the carrier’s choice of
transhipment port. This
argument appears to be inconsistent with the parties’
own position that hinterland and transhipment traffic
are inseparably linked and that the choice of whether or
not to call at a particular port is dictated primarily by
hinterland considerations. As vessel sizes increase, the
hinterland aspect will become even more important (112).
Obviously, therefore, an operator enjoying a competitive
advantage with regard to hinterland traffic (good road
and rail connections, good geographical location) will
also enjoy a competitive advantage with regard to
transhipment traffic. This is a conclusion shared by
independent observers (113) and confirmed by port stat-
istics, which show that transhipment traffic is strongly
concentrated in just five main northern European deep-
sea ports — which also happen to have a high share of
northern European hinterland traffic (see recital 53,
including footnote).

Conclusion

(113) It may be concluded from the above analysis of future
developments and trends that the concentration will
lead to the creation of a dominant position of the parties
on the relevant market even in the light of future
developments considered up to and including 2005.

3. Countervailing buying power

(114) The parties argue that the shipping lines possess signifi-
cant countervailing buying power as regards the north-
ern European terminal operators (see section V.1 of the
statement of defence).

( 109) North European containerisation, pages 59 and 60.
( 110) Joint investment in the European Rail Shuttle.
( 111) Statement of defence, paragraph 36.
( 112) The economics of the largest vessels are predicated on spending
as much time at sea as possible — it follows that only those
ports that are able to generate sufficient hinterland volumes will
be contenders for calls by these vessels and hence actual and
potential competitors on the transhipment market.

( 113) See for exampe, North European containerisation, at page 213.

(115) The parties contend that recent shipping line consoli-
dations and alliance structures have resulted in a high
level of concentration on the demand side. This is, in the
parties’ view, exemplified by the northern Europe-Far
East trade, where five carrier groupings account for 82 %
of the total capacity (see paragraph 148 of the statement
of defence). The concentration amongst Hutchison’s
customers in Felixstowe and ECT’s customers is even
higher than the market average with four carrier group-
ings accounting for [60 % to 70 %]* of ECT’s total
throughput and four carrier groupings accounting for
almost [70 % to 80 %]* of the throughput in Felixstowe.
Because of the customers’ greater share of fleet and trade
capacity and their ability to switch large volumes to
alternative ports, the terminal operators are faced with a
considerable degree of buying and negotiating power.
the
The parties further argue that in the light of
significant economic consequences of loss of an im-
portant customer, even the threat of shifting part of the
volumes serves as a sufficient constraint on the pricing
behaviour of the port operators.

(116) As regards the level of concentration on the market, the
parties rely on previous decisions where the Commission
found that a specific degree of concentration on the
demand side indicated buying power. In particular, the
parties quote from a section of the decision in BP Amoco/
Castrol (114)
(see paragraph 144 of the statement of
defence), where the Commission, when assessing the
creation of a possible oligopoly, found that the shipping
lines had a strong buying power as regards the suppliers
of marine lubricants.

(117) In this respect, the market structure, as well as the
relevant product and the purchase conditions assessed
in the decisions cited by the parties, in particular in the
BP Amoco/Castrol case, bear little resemblance to those
at hand in the present case. In BP Amoco/Castrol, five
large suppliers of marine lubricants were pitted against
each other in a bidding process and faced significant
customer switches on a market where capacity was not
constrained and where the physical presence of the
supplier was not essential. This is fundamentally different
from the present situation: the stevedoring service is
not an isolated product that can be purchased on a
geographically unlimited market, where a switch from
one supplier to another has few additional consequences
for the purchaser’s operations. On the contrary switches
to other ports are dependent on several factors and
require substantial changes to the services offered by the
shipping lines (115). The shipping lines’ position as
regards port operators is therefore completely different
from their position as regards suppliers of products
the vessels, such as
necessary for the operation of
lubricants.

(114) Commission Decision in Case COMP/M.1891 — BP Amoco/

Castrol (OJ C 301, 21.10.2000, p. 23).

(115) See recitals 120 and 123 to 126.

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(118) In any event, it cannot be accepted that the demand side
is highly concentrated (116). While members of shipping
alliances may in many instances negotiate collectively
with a particular terminal operator, this is not always
the case (117) — whether to do so is ultimately a matter
of choice for each individual member of the alliance. It
should also be noted that alliance members compete
with each other both on price and on service and their
interests do not therefore always coincide. This applies in
all areas, including the choice of terminal operator (118).

(119) The concentration on the customer side, such as it may
be, must in any event be compared to the concentration
existing on the supply side. This is particularly relevant
concerning the northern Europe-Far East trade upon
which the parties’ estimate of concentration is based. As
seen above (see recitals 104 et seq.), there is currently a
limited number of terminal operators able to accommo-
date the largest vessels being used on this trade. The
concentration on the supply side is likely to increase
further in response to the market trends identified above.

(120) The shipping lines’ ability to switch throughput (com-
pletely or partially) to alternative ports is dependent on
several factors, such as available capacity, established
loops and services and appropriate hinterland, feeder
and relay infrastructure.

(121) At present few of the main hub ports have sufficient
capacity to accommodate more than limited new vol-
umes. This may change in the future, but it is sympto-
matic of the current situation that the parties themselves
have stated in submissions to the Commission that the
capacity which will be freed by the move of P & O
Nedlloyd/Grand Alliance traffic to the new Euromax
terminal will only be sufficient to grow traffic in line
with market growth.

(122) The investigation has furthermore revealed that the port
handling charges are only one, and not
the most
important, factor when the shipping lines choose which

port to call at. That choice is instead dictated primarily
by hinterland connections, availability of feeder and
relay services, direct coastal access and draught of access
channels and berths as well as the timetable and
schedule of the service in question. Service levels are
also important. Once a shipping line has started to
operate a successful service calling at a particular port,
they are therefore faced with a strong incentive to
continue to call at the port in question (119). Depending
on the extent of operational restructuring required in
the specific instance for a port switch, there will often
be a large margin of manoeuvre for the terminal
operators to raise the port handling charges, without
this increase being sufficient to justify a change of port
for the shipping lines. A switch of port would therefore
only be commercially defendable if the changes did not
cause significant interruption or inconvenience to the
shipping line’s operation.

(123) The parties have argued that there is no real impediment
to switching ports, stating that the costs involved are
not substantial and that the switch of port does not
result in any operational delays. The Commission has
however received information from the shipping lines
stating that switches require significant reworking of
loops and that changes in terminal cut-offs would
cause difficulties for their customers. The loops are
furthermore often agreed upon amongst the consortia
members. In order not to diminish the efficiencies gained
by the consortia arrangement, shipping lines would
therefore be required to take account of the interests of
fellow consortia members when considering whether to
switch to another port.

(124) In this context,

the parties argue that switches in
transhipment traffic can easily be made without up-
setting the liner shipping operation. Transhipment,
unlike hinterland traffic, is footloose in the sense that it
can be loaded or unloaded at any port at which
the shipping line calls for its hinterland traffic (see
paragraphs 116 and 117 of the statement of defence).

( 116) See to this effect Commission decision in Case M.1651 —

Maersk/Sea-Land (OJ C 313, 30.10.1999, p. 6).

( 117) Thus for example, Eurogate: ‘With our shipping line customers
we have individual contracts as well as contracts that have been
commonly negotiated and signed individually by each shipping
line.’ [Translation of German original]. And further (Gothen-
burg):
‘Negotiations are done individually with the shipping
companies’.

( 118) As an example, P & O Nedlloyd has chosen to establish a hub
in Rotterdam; Hapag-Lloyd has instead invested in Hamburg.
Both operators are members of the Grand Alliance. The parties
themselves point out that there will be no obligation on Grand
Alliance members calling at Rotterdam to use the joint ECT/
P & O Nedlloyd Euromax facility in that port, even though
P & O Nedlloyd may wish them to do so.

(119) P & O Nedlloyd (reply to Commission’s questionnaire): ‘... whilst,
in theory, it is open to carriers to switch ports to obtain a wider
choice of stevedoring service providers,
in practice this is
difficult. Apart from the issue of lack of port substitutability,
the more calls a carrier makes at a given port the more
arrangements it will have in place to deal with these calls. [...]
Therefore, once a carrier has established ports at which it calls,
it becomes economically more difficult for the carrier to switch
ports for a significant portion of its cargo and for transhipment
activities. Further, as vessel sizes increase, this will bring about
a corresponding decline in the number of port calls a carrier
will make and this will again serve to increase the importance
of the ports of Rotterdam and Felixstowe.’ And further, CP
Ships: ‘Flexibility is limited as service quality and cost is very
infrastructure and it can be
much influenced by a lines
quite difficult
to shift resources, or find new resources, to
accommodate a change of ports.’

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(125) Apart from the possible need to coordinate transhipment
moves between consortium members, the choice of
transhipment port is likely to be dictated primarily by
service levels, available relay and feeder connections,
and geographical
location. Price is not a paramount
consideration (see recital 122). Furthermore the risk of
losing some transhipment volumes is unlikely to be
sufficient to constrain the behaviour of the port oper-
ators. The parties themselves have stated that tranship-
ment traffic is secondary to hinterland traffic in import-
ance for terminal operators, in view of the lower margins
and volumes associated with transhipment.

(126) The parties have provided empirical evidence of port
switches (partial switches and switches of entire services)
between the years 1996 and 2001 in support of their
view that shipping lines can and do exercise their market
power by switching demand (see paragraph 154 of the
statement of defence). With the exception of the switch
by Maersk Sealand of some transhipment traffic from
Rotterdam to Bremerhaven, the parties have not pro-
vided details of these moves. In particular, the evidence
submitted does not show that the switch of port has
been motivated by price considerations. On the contrary,
available data suggests that the switches have been
motivated primarily by operational considerations (for
example, MSC’s partial switch of larger vessels from
Antwerp to Le Havre) or restructuring following new
consortium arrangements. In the case of the switch of
Maersk Sealand transhipment volumes (feeder traffic to
Norway and the Baltic) from Rotterdam to Bremerhaven
in 2000, the prime drivers were the improvement of the
feeder services and the loss of capacity at the old Delta
Sea-Land terminal. The relative dearth of switches and
the fairly stable market shares of the leading ports
between 1997 and 1999 would tend to demonstrate
that switches are not undertaken lightly by shipping
lines (120).

(127) The parties argue that various developments on the
market, such as the alleged decline in the level of port
handling charges and the establishment of shipping line
owned facilities indicate that the shipping lines have
already successfully exercised countervailing buying
power as regards the port operators (see section V.1.5
of the statement of defence). The parties contend that
increases in shipping lines’ freight rates over the recent
years have not been matched by increases in port
handling charges and that the latter have even declined
in real terms. According to the parties, the shipping
lines are, furthermore, effectively hindering the terminal

( 120) In a Lloyd’s List special report of 25 April 2001 (‘World top
container ports’, page 6), the managing director of Maersk
Benelux (joint venture partner in Maersk Delta) is quoted as
saying that the switch of Maersk transhipment volumes from
Rotterdam to Bremerhaven ‘cost a lot of money’ (emphasis added)
and that there is therefore no guarantee that the volumes
diverted to Bremerhaven will return to Rotterdam. This contra-
dicts the notifying parties’ assertion that switches of tranship-
ment volumes can be made easily.

operators from invoicing the shippers directly for con-
tainer handling services. The parties argue that this
would enable the terminal operators to attract new
traffic by offering attractive rates. Instead, the shipping
lines have introduced Terminal Handling Charges
(‘THC’), whereby they charge the shippers for the
stevedoring services carried out by the terminal oper-
ators. According to the parties, the THC is set at a level
in excess of that of the actual port handling charge,
implying that the shipping lines are able to achieve
mark-ups on port charges.

(128) As regards the port handling charges, it is not clear from
the parties’ arguments that any decrease in the average
port handling charge per move has been caused by
shipping lines’ ability to constrain or dictate the pricing
on the market. It is equally plausible that this is a result
of increased volumes and volume discounts and rebates.
The parties have submitted a chart (121) showing the
development of revenue per selected customer in the
port of Felixstowe over the period 1992 to 2000. The
parties interpret this table as providing support for their
thesis that handling charges have declined over that
same period as a result of the increased buying power of
the shipping lines. The Commission does not share that
view. The table shows, inter alia, that [A]* paid 21 % less
per container in the year 2000 than it did in 1992.
However over that same period [A’s]* throughput in
Felixstowe increased by some 800 %. Against that
background, the decrease in price is far less than that
which might have been expected as a result of volume
rebates and lower unit costs (122). Another line, [B]*,
increased its throughput at Felixstowe by 344 % over
the period in question, without any reduction in the
price per container. It is true that lines such as [C]* and
[D]* were paying a lower price per container in 2000
than they did in 1992, without any commensurate
increase in throughput. It should however be noted that
both of
these lines have been experiencing severe
financial difficulties — it is therefore far more likely that
the decline in the rates charged to these lines is a
reflection of their inability to pay rather than evidence
of buying power. The Commission notes in this context
that the Hutchison Whampoa ports business showed an
operating profit margin of 39,7 % and a profit attribu-
table to shareholders amounting to 24,6 % of turnover
in 1999. In the same year, Hutchison’s United Kingdom
port operations showed an 11 % increase in earnings
before interest expense and taxation (EBIT) over 1998
figures (source: Hutchison Whampoa annual report
1999, pages 4 and 18). In the following year (2000), the
ports division reported an increase of 11 % in EBIT over
1999 figures. The annual report 2000 also notes that
ECT has contributed positive earnings to the Group
since the latter’s acquisition of ECT in November 1999
(page 20 of the annual report). The Commission finds
these statements and figures difficult to reconcile with

(121) E-mail of 10 April 2001.
(122) It should be recalled that the greater part of the costs of a
terminal operator are fixed (infra- and superstructure costs).

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the parties’ portrayal of terminal operators as being
under intense price pressure from customers.

respectively and represent a major investment and
commitment by these lines (126).

(129) As to THCs, it is not clear from the available evidence
that the terminal operators have previously been able to
charge each individual shipper directly or that such a
system would be realistic. However, if shipping lines are
in fact passing on port handling charges to their
customers as an element in the THC (with a markup),
this would suggest that the shipping lines would have
little real incentive to switch throughput to another port
solely in order to reduce port handling charges. In the
statement of defence, paragraphs 167 and 168, the
parties claim simultaneously and self-contradictorily
(a) that THCs do not vary by port (123) (and hence that
shipping lines do not or cannot pass on to their
customers the benefit of any difference in handling fees
as between two ports or terminals), and (b) that they
do (124).

(130) The parties also argue that the emergence of carrier
solely- or jointly-owned terminals even in ports which
previously refused to establish such facilities, reflects the
countervailing buying power of
the shipping lines.
However, firstly, only a handful of such terminals (125)
are currently operational in northern Europe and all have
strong participation by incumbent terminal operators.
Secondly, the setting up of a jointly owned facility
developed and structured in such a way as to optimise
the shipping line’s services also severely reduces the
incentive for the shipping line to switch to another port.
The shipping line is therefore to a considerable extent
locked in to using the jointly-owned terminal, which
would tend significantly to negate any relative bargaining
power which the shipping line might otherwise have
been able to exert by threatening to switch its
throughput to other terminals. This is particularly true
for the jointly-owned facilities in which ECT has or will
have a participation: Maersk Delta and Euromax. These
terminals are intended to serve as major northern
European hubs for Maersk Sealand and P & O Nedlloyd

( 123) ‘Any gain a shipping line achieves from reduced port charges as
a result of a switch of port would directly benefit the shipping
line concerned as the shipping line would not be able to vary
the THC from the level established by the freight conference’
(paragraph 168). This implies that the THC is the same in both
ports (the port from which the switch is made and the port to
which the switch is made).

( 124) ‘[The shippers] will choose port by reference to the THCs’

(paragraph 167).

( 125) Maersk Delta (Rotterdam), North Sea terminal (Bremerhaven).
Possibly also Southampton (P & O ports) and Aarhus (Maersk).
The Altenwerder terminal in Hamburg has a 25 % participation
by the Hapag Lloyd shipping line. It is questionable whether
Altenwerder should be included in the ranks of jointly (carrier)
owned terminals.

VII.

FINAL CONCLUSION

(131) For the reasons set out above it may be concluded that
the concentration would lead to the creation of a
dominant position on the market for the provision in
northern Europe of stevedoring services for tranship-
ment
traffic carried by deep-sea container vessels,
through which effective competition in the common
market would be significantly impeded.

VIII. UNDERTAKINGS SUBMITTED BY THE PARTIES

(132) In order to resolve the competitive concerns identified
by the Commission, the parties submitted undertakings
on 8 June 2001. Those undertakings are set out in
Annex II. They may be summarised as follows.

ECT will divest its minority shareholding in the Maersk
Delta BV joint venture (‘MDBV’), over which ECT has
joint control, to an independent buyer approved by the
Commission.

The parties will take measures to enable MDBV to handle
third party business freely in competition with ECT from
the date of the Commission’s decision in this case:

MDBV will be released from all contractual restrictions
that currently prevent MDBV from handling third party
business;

the parties will cause ECT to renounce the exercise of its
veto rights in MDBV;

RMPM will make available to MDBV capacity to allow
MDBV to handle third party business equivalent to [a
certain proportion]* of MDBV’s estimated total capacity
for each of the years 2001 to 2005;

RMPM confirms that land and necessary facilities at the
planned Maasvlakte II area will be allocated according to
an open, transparent and non-discriminatory procedure.

(126) It should also be noted that these two carriers are tied to
Rotterdam through their investment
in the European Rail
Shuttle, which provides regular shuttle trains (container loaded)
to several European destinations, such as Milan, Mainz and
Mannheim, Prague and Bratislava.

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IX. ASSESSMENT OF THE PROPOSED
COMMITMENTS

(133) The Commission has examined the proposed commit-
ments and considers that they ensure the possibility of
significant competition in one of the main transhipment
hubs in northern Europe, without giving rise to new
competition concerns. The divestiture and interim
measures will allow MDBV to handle third-party busi-
ness independently in the Port of Rotterdam. The Port
of Rotterdam is one of a very limited number of
transhipment hubs in northern Europe. There are only
five effective transhipment hubs in northern Europe at
present; it is probable that the number of hubs will be
reduced to only three in the future. Rotterdam is, by
virtue of its natural advantages, likely to be among the
survivors. Against that background, the introduction of
effective competition in Rotterdam itself can be expected
to have a considerable constraining effect on any market
power that the concentration might otherwise have been
able to exercise. This is all the more so because the cost
for a shipping line of switching from ECT to Maersk
Delta (127) — switching not only within the same port,
but within the same area of the port — is insignificant
when compared to the cost of switching traffic from
Rotterdam to another port. Further, the Maersk Delta
terminal is already operational and has the backing of
a strong corporate group (A. P. Møller). Once the
undertakings have been implemented, it will therefore
be in a position to offer immediate and effective
competition to ECT.

(134) The obligation to make available capacity is essential to
ensure that MDBV has the means at hand to become an
active competitive force. Without that specific undertak-
ing, capacity constraints might effectively curtail compe-
tition from MDBV.

(135) The above aspects of commitments (a),

(b) and (c)
constitute conditions, as only by fulfilling these under-
takings can the desired structural change on the relevant
market be achieved.

(136) The remaining aspects of the undertakings with the
exception of (d) constitute obligations, as they concern
the implementing steps necessary to achieve the structur-
al change that is sought. In particular this relates to:

(a)

the provisions relating to MDBV’s freedom to
determine tariff, tariff structure and pricing and
freedom to compete with other stevedoring com-
panies as described in paragraph 4(b) and (c) of
Annex II;

(b)

the provisions relating to the trustee in para-
graphs 7 to 12 of Annex II.

(137) In this context, the Commission takes note of RMPM’s
assurance that land at the Maasvlakte II development
(on which construction may start in 2007) will be
allocated in a fair, transparent and non-discriminatory
manner (commitment (d) in recital 132). MDBV will
thus have the same opportunity as other Rotterdam
terminal operators to expand its capacity in the period
after 2005 (128).

(138) Taken as a whole, the undertakings submitted by the
parties will prevent
the emergence of a dominant
position on the market for the provision in northern
Europe of stevedoring services for transhipment traffic
carried by deep-sea container vessels.

(139) In conclusion, the Commission considers that the under-
takings submitted by the parties are sufficient to address
the competition concerns raised by this concentration,

HAS ADOPTED THIS DECISION:

Article 1

in Annex II,

Subject to full compliance with the conditions and obligations,
as set out
the notified operation whereby
Hutchison Ports Netherlands BV and Rotterdam Container
Participatie Maatschappij BV acquire joint control of Europe
Combined Terminals BV is hereby declared compatible with
the common market and the functioning of the EEA Agree-
ment.

Article 2

This decision is addressed to:

Rotterdam Container Participatie Maatschappij BV
Galvanistraat 15
PO box 6622
3002 AP Rotterdam
The Netherlands

Hutchison Ports Netherlands BV
Nolst Trenité
Plaza Weena 666
PO box 190
3000 AD Rotterdam
The Netherlands

Done at Brussels, 3 July 2001.

For the Commission

Mario MONTI

Member of the Commission

( 127) For example, in reaction to an attempt by ECT to increase prices.

(128) The Maasvlakte II (approximately 2 500 ha) is the only signifi-
cant capacity development (in Rotterdam) foreseen for the
period after 2005.

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EN

Official Journal of the European Union

5.9.2003

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EN

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L 223/29

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L 223/30

EN

Official Journal of the European Union

5.9.2003

ANNEX 2

Re: undertakings in Case COMP/JV.55 — Hutchison/RCPM/ECT

I.

INTRODUCTION

1.

2.

On 31 January, 2001, pursuant to Article 4 of Council Regulation (EEC) No 4064/89 (the ‘Merger Regulation’)
Hutchison Ports Netherlands BV and Rotterdam Container Participatie Maatschappij BV notified their acquisition
of 35 % each of the shares in ECT Beheer BV. The latter holds 100 % of the share capital in Europe Combined
Terminals BV (‘ECT’). The notification has been submitted without prejudice to the notifying parties’ view that
the notified transaction does not constitute a concentration.

In connection herewith and with the same reservation expressed in their notification, the notifying parties and
Rotterdam Municipal Port Management (‘RMPM’) (collectively referred to as ‘the parties’) make the following
commitments pursuant to Article 8(2) of the merger Regulation. The commitments are subject to the
Commissions finding that the notified transaction is compatible with the common market pursuant to
Article 8(2) of the merger Regulation (the ‘decision’).

II.

DIVESTITURE OF ECT’S SHAREHOLDING IN MDBV

3.

The parties undertake that ECT will divest its shareholding in Maersk Delta BV (‘MDBV’) to an independent
buyer approved by the Commission within a maximum period of [...]* from the date of the decision. This
period may be extended by an additional period of maximum [...]* at the parties’ reasoned request, provided
that the trustee appointed pursuant to section 3 can satisfactory establish that ECT has, despite its best efforts,
been unable to carry out such divestiture within the initial period. When considering such extension of the
deadline for the divestiture of the shares, the Commission shall take into account the procedural process set
out in Article 4 of the joint venture agreement between ECT and Maersk Benelux BV (the joint venture
agreement).

III. RELATIONS WITH MDBV

Changes to contractual restrictions

4.

From the date of the decision the parties undertake that:

a)

b)

c)

in order to permit MDBV to handle third party business, the parties will immediately and unconditionally
release MDBV from any contractual restriction, which currently prevents MDBV from handling third
party business and inform MDBV thereof;

the parties will cause ECT to renounce the exercise of ECT’s veto rights in MDBV and confirm MDBV’s
freedom to determine tariff, tariff structure and pricing;

the parties will cause ECT to confirm MDBV’s freedom to compete with other providers of stevedoring
services, including ECT.

Assurance of available capacity for MDBV

5.

RMPM is committed to enabling MDBV to develop such capacity as to allow it to handle third party business
equivalent to [a certain proportion]* of MDBV’s total capacity for each of the years 2001 to 2005. RMPM
undertakes to make available to MDBV at normal business conditions the land, facilities, barge loading areas
and quay walls necessary to achieve this objective. For the purpose of calculating MDBV’s need for capacity, [a
certain document]* will be the relevant starting base. Also and in order to ensure that no undue advantage is
taken from RMPM’s commitment, calculations will disregard upward capacity not stemming from natural
growth, such as acquisitions or excessive traffic flows originally handled in other ports and switched by [a
certain shipping line]* to [a certain terminal]*.

5.9.2003

EN

Official Journal of the European Union

L 223/31

6.

RMPM confirms that land and necessary facilities at the planned Maasvlakte II area will be allocated according
to an open, transparent and non-discriminatory procedure.

IV. TRUSTEE (1)

Appointment of a trustee

7.

8.

No later than two weeks after the Commission has adopted the decision, the parties shall propose to the
Commission a trustee suitable to monitor and implement the commitments referred to above. The trustee must
be independent from the parties. The appointment of the proposed trustee is subject to approval of the
Commission.

Should the Commission reject the proposed trustee, the parties will propose the name of a new trustee within
two weeks after being informed of the rejection. If the new trustee is rejected by the Commission, the
Commission shall nominate a suitable trustee whom the parties will appoint or cause to be appointed.

Mandate of the trustee

9. Within one week of the date on which the Commission has approved a trustee, the parties shall enter into a
mandate agreement with the trustee. The mandate agreement shall confer on the trustee all the rights and
powers necessary to exercise its tasks and describe the obligations and the remuneration. The terms of the
mandate agreement will have to be approved by the Commission.

10. The trustee shall monitor and advise the Commission on the implementation of this commitment and ensure
its compliance by the parties. The trustee will provide, every six month, written reports to the Commission on
the progress of the discharge of its duties of its mandate, identifying any respect in which it has been unable to
discharge its mandate. The parties shall receive a non-confidential copy of such reports.

11.

If the parties have not entered into a binding contract with a purchaser approved by the Commission within
the time period specified above (including the maximum additional time period), or have not completed the
sale within a further period of one month, the trustee shall have the power to carry out the divestiture within a
further time period of two months. The trustee shall carry out the divestiture on the best possible terms and
conditions in accordance with good business practice. He is not bound by any minimum price.

12. The parties shall provide the trustee with all such assistance and information as the trustee may reasonably

require.

13. The trustee is bound to respect the confidentiality of all information provided to him or otherwise obtained by
him in the course of the exercise of his mandate. Notwithstanding the trustee’s overall responsibility to carry
out his task as an independent unrelated third party, the trustee shall have, to the extent possible given the
nature of his task, due regard to the commercial interest of the parties and undertake in the mandate to do so.

(1) The following provisions are drawn up in accordance with the Commission notice on remedies acceptable in accordance with

Regulation (EEC) No 4064/89 and in accordance with Regulation (EC) No 447/98, notably recitals 53-57 thereof.