Opinion of the European Economic and Social Committee on the ‘White Paper on the review of Regulation No. 4056/86, applying the EC competition rules to maritime transport’(COM(2004) 675 final)
Date: 2004-12-16
Institutions: European Economic and Social Committee
Subjects: common transport policy, competition law, maritime conference, maritime transport

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the ‘White Paper on the review of
Regulation No. 4056/86, applying the EC competition rules to maritime transport’

(COM(2004) 675 final)

(2005/C 157/23)

On 13 October 2004 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the ‘White Paper on
the review of Regulation 4056/86, applying the EC competition rules to maritime transport’.

The Section for Transport, Energy, Infrastructure and the Information Society was instructed to prepare the
Committee's work on the subject.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 16 December), and in view of the
urgency of the matter, the European Economic and Social Committee appointed Dr Bredima-Savopoulou
as rapporteur-general and adopted the following opinion by 148 votes to 12 with 10 abstentions:

1. Introduction

the Liner Code to be compatible with the EC Treaty. Regulation
954/79 (2) (the ‘Brussels package’) in the Commission's view (at
the time of adoption) strikes a balance between the wishes of
developing countries for access to liner conferences but also
maintains commercial principles between OECD countries and
complies with the basic principles of the EC Treaty.

1.1 Maritime transport, an international and globalised
activity ‘par excellence’, is basically provided according to two
types of services: liner and tramp. Since 1875, liner shipping
has been organised in liner conferences,
i.e., associations of
maritime carriers providing cargo transportation of scheduled,
advertised services upon uniform or common rates on particu-
lar geographical routes. In the tramp sector, transportation of
bulk cargoes dry or liquid is provided under non-scheduled,
non-advertised sailings and rates are freely negotiated ad hoc
case by case according to conditions of supply and demand. As
has most ingenuously been observed, liner services operate like
buses whilst tramp-shipping services are the taxis of the seas,
i.e. liner conferences offer scheduled services with fixed depar-
tures and arrivals whilst
tramp shipping offers close knit
services depending on the specific demand.

1.2
In 1974, the United Nations Conference on Trade and
Development (UNCTAD) adopted the Code of Conduct for
Liner Conferences to meet the aspirations of developing coun-
tries for greater participation of their carriers in the transporta-
tion of
liner cargoes. The Liner Code provided the cargo
sharing formula of 40 %-40 % in the transportation of liner
cargoes between carriers of exporter and importer countries
leaving 20 % of liner cargoes controlled by liner conferences to
carriers of third countries. The Liner Code was ratified by
several EU Member States as well as other developed (OECD)
and developing countries and entered into force on 6 October
1983. Therefore, the Liner Code is the basic legal instrument
governing the liner trades worldwide. The EU adopted Regu-
lation 954/79 (1) providing the conditions for application of

(1) 15.5.1979 concerning the ratification of accession by the Member

States to the UNCTAD Liner Code.

the

In 1986,

1.3
EU adopted Regulation 4056/86
concerning the application of Articles 85-86 EC to maritime
transport. The Regulation makes express reference to Regu-
lation 954/79 and to the UNCTAD Liner Code; its recitals are
revealing in that respect. Liner conferences were distinguished
between open and closed, depending on whether access was
automatic to new entrants or whether acceptance by the
conference members was necessary. By Regulation 4056/86 the
EC adopted the system of closed conferences coupled with
open trades, meaning that effective competition by outsiders
was safeguarded and other restrictions of competition by liner
conferences were not allowed. Regulation 4056/86 was a
Council Regulation, which was an oddity for a competition
Regulation. This was basically provided as a recognition of the
special features of maritime transport and its international char-
acter.

(2) cf. Bredima-Savopoulou/Tzoannos ‘The Common Shipping Policy of
the EC’, North Holland, Asser Institute 1990; L. Schmdt – O. Seiler
‘The Unctad Code of Conduct for Liner Conferences’, Hamburg
1979; A. Mc Intosh ‘Anti-trust implications of liner conferences’
Lloyds Maritime and Commercial Law Quarterly, May 1980 p. 139;
Clough/Randolph ‘Shipping and EC Competition Law, Butterworths.
1991, Bellamy/Child’ Common Market Law of Competition ‘Sweet
& Maxwell, 1993, 2001; P. Ruttley’ International Shipping and EEC
Competition Law (1991) 2 ECLR, 5; Kreis ‘European Community
Competition Policy and International Shipping’
(1989) Fordham
International Law Journal, p. 411, vol. 13; J. Erdmenger, Conference
on EEC Shipping Law, 4-5/2/1988, Rotterdam; Bredima ‘The
Common Shipping Policy of the EEC’, 18 Common Market Law
Review, 1981, p. 9-32.

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1.4
According to Regulation 4056/86 liner conferences
were granted a block exemption under certain conditions and
obligations. Conferences were allowed to perform several activ-
ities (e.g. cargo and revenue allocation among members, coor-
dination of timetables, allocation of sailings among members)
which are compatible with EU competition law as well as two
hard core restrictions of competition: horizontal price fixing
and capacity utilisation. The block exemption of the hard core
restrictions was justified on the grounds that conferences had a
stabilising effect on liner rates, provided indispensable and effi-
cient services to shippers and were subject to effective competi-
tion from outsiders. Regulation 4056/86 is the most generous
block exemption Regulation afforded to any industry sector in
the European Union. No other industry sector has an exemp-
tion from European competition rules for price fixing. Regu-
lation 4056/86 is also unique in that it grants a block exemp-
tion of indefinite duration.

1.6.1
summarized in ten key points:

The basic characteristics of tramp shipping can be

— globally competitive markets;

— close to perfect competition model;

— different sub-market segments in response to customer

needs;

— competition between sub-markets for cargo;

— volatile and unpredictable demand;

— many small entrepreneurial companies;

Since 1986, the Commission and the European Court of
1.5
in a number of cases (1), considered several
Instance,
First
aspects of
the conference activities. The Court adopted a
number of legal principles in the application of Regulation
4056/86. These principles were emulated by the conferences
operating in EU liner trades. Over the years conference activ-
ities have been reduced dramatically in both size and scope,
due to the changing market conditions. More particularly:

— global trade patterns;

— ease of entry and exit;

— very cost effective;

a) Conferences can no longer exercise inland price fixing for

the land leg of multimodal transport.

b) Tariffs must not only be common or uniform between the
conference members but also with regard to all shippers of
the same commodity.

c) Conferences cannot place restrictions on members wishing

to enter into individual service contracts with shippers

d) Capacity management is allowed only on condition that it
will not create an artificial peak season in conjunction with
any rate increases.

1.6 Moreover, Regulation 4056/86 provided that
tramp
services and cabotage services were activities to which it did
not apply. In the absence of a special Regulation, the EC Treaty
Articles 85-86 were directly applicable on these activities. The
tramp sector was considered as one of the very rare examples
of perfect competition worldwide and cabotage services were
considered as not producing any significant anti-competitive
result in EC trade.

— responsive to development of markets and shippers' needs.

Overall,

1.6.2
is highly frag-
the tramp services market
mented (2). In the past thirty years, bulk pools and specialized
trades have emerged to fulfil specific needs of shippers and
charterers. Therefore, in the vast majority of cases this market
has worked to the satisfaction of charterers/shippers without
presenting major problems with competition rules either inter-
nationally or in the EU context.

1.7
Currently, there are 150 liner conferences worldwide
out of which 28 operate in trades to and from the EU. They
basically operate on the three main trades to and from the EU,
i.e. the transatlantic trade, the Europe-Eastern Asia trade and
the Europe-Australia/New Zealand trade. Their members
include both European and non-European liner
shipping
carriers. Moreover, other conferences ply in the EU/South
America trade, the EU/West Africa trade and other areas.

1.8 Most OECD countries recognize the liner conference
system and have granted some form of anti-trust immunity.
The US recognize the open conference system under the Ocean
Shipping Reform Act (3) (OSRA) 1999. Australia provides for a
limited exemption for liner conferences under the Australian
Trade Practices Act 1974 (Part X) reviewed in 1999, which is
currently under re-examination. Canada, Japan and China are
similarly recognizing the liner conference system and granting
anti-trust immunity or exemptions under conditions.

(1) e.g. Revised TACA (14.11.2002 OJ L 26 of 31.1.2003, p. 53), TAA,
FEFC, EATA, Eurocorde; CEWAL, COWAC, UKWAL (OJ L 34,
10.2.1993, p. 20), French-west African Shipowners Committees OJ
L 134, 18.5.1992, p .1.

(2) According to Clarkson Research Studies,

‘The Tramp Shipping
(April, 2004) there are about 4,795 companies owning
Market’
tramp vessels, only 4 have over 300 ships (i.e., 2 % market share)
and the average number of ships owned is 5.
(3) Amending the US Merchant Shipping Act 1984.

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1.9
In the meantime, the Liner Code, as the basic interna-
tional instrument governing liner shipping between developed
and developing countries, and the liner conference system, as
the basic international system for coordination of liner activ-
ities, have been consecrated in several
instruments
adopted by the EU.

legal

— The Europe Agreements (most of which are now redundant
following the 2004 enlargement) provided a standard
clause referring to the principles of the Liner Code and the
liner conferences as the basic yardsticks to be followed in
the liner trades.

— The EU/Russia Agreement

(Art. 39(1) a) and the EU/

Ukraine Agreement are couched in similar terms.

— Finally,

in the ongoing WTO negotiations on services
‘offers’ between the EU and other countries were based on
the understanding that
the Liner Code is an applicable
instrument.

823/2000 (3) which will expire on 25 April 2005. Liner
consortia constitute a form of cooperation widely applied in
liner shipping.

1.10.3
Another form of cooperation are the so-called discus-
sion agreements which emerged in the 1980s and are recog-
nized in other jurisdictions (US, Asia, Australia and South
America).

In 2003,

1.11
the European Commission repealed the
procedural part of Regulation 4056/86 and substituted it by
Regulation 1/2003 (4) which is nowadays the implementing
Regulation applicable on all sectors of economic activities.
Hence, the same provisions on decentralisation of competition
procedures apply to the liner sector as in all other sectors.
However, Article 32 of Regulation 1/2003 provided an excep-
tion from its scope for tramp and cabotage services to and
from EU ports.

liner

Recent

independent

since the 1980s,

1.10
regulatory developments indicate that
most developed countries (US, Australia, Canada, Japan) have
approached the EU system and regulated the liner conference
system under similar terms to the EU. Market developments are
liner operators
significant:
(outsiders) have increased their market shares on the main
trades to and from Europe to the detriment of conferences.
This can be proved by an analysis on a trade-by-trade basis but
overall
the trades remained open to effective competition.
Other practices in the framework of conferences have emerged
e.g. liner carriers members of conferences offer services on the
basis of service contracts with shippers whereby the shipper
agrees to commit a quantity of cargo over a certain period of
time to be carried under individually agreed rates with the
carrier.

1.10.1
The practice of service contracts has been regulated
by EU jurisprudence as well as by US legislation (OSRA 1999)
as providing services to shippers. Indeed, in the transatlantic
trade 90 % of liner cargo and in the Europe/Australia/New
liner cargo are transported
Zealand trade 75 %-80 % of
through service contracts. Service contracts are strictly confi-
dential between the carrier and the shipper.

1.10.2
Containerisation brought about significant develop-
ments in the liner trades. Liner operators have been coop-
liner
erating increasingly in consortia which perform several
services but do not engage in price fixing, in the context of
consortia. Container shipping is a capital intensive business but
provides
certain conditions,
consortia have been granted a block exemption under Regula-
tions 479/1992 (1) and 870/1995 (2) amended by Regulation

economies of

scale. Under

In the meantime, the OECD secretariat

1.12
in a report
2002 (5) concluded that anti-trust exemptions to liner confer-
ences for price fixing activities should be reviewed with the
aim to be removed, except where specifically and exceptionally
justified but
individual Member
to the discretion of
States. The correctness of
the OECD report was strongly
contested. Hence,
it was published as a report of the OECD
Japan,
secretariat only. Moreover, key players (Canada, US,
Australia) declared that they had no intention to change their
regimes at this stage.

left

it

2. The European Commission's White Paper 2004

2.1
The European Commission, prompted by the Lisbon
European Council 2000 undertook a review of Regulation
4056/86. The Lisbon Council called the Commission ‘to speed
up liberalisation in areas such as gas, electricity, postal services
and transport’. The review process started in March 2003 with
a publication of a consultation paper and 36 submissions from
stakeholders (shippers, carriers, Member States, consumers).
The Erasmus University Rotterdam assisted the Commission in
processing the replies. Thereafter, a public hearing was
conducted in December 2003 and a discussion paper was
issued in May 2004 addressed to Member States. On 13
October 2004, the Commission released a White Paper accom-
panied by an Annex in which it considers repealing the block
exemption from liner conferences. It analyses whether to main-
tain, modify or repeal the current Regulation and whether to
replace it by optional regimes such as the proposal of the Euro-
pean Liner Affairs Association (ELAA). For tramp shipping
some form of guidance is suggested. The Commission also
invites the Committee to submit comments, within a period of
two months.

(1) OJ L 55 of 29.2.1992. p.3.
(2) OJ L 89 of 21.4.1995, p. 7.

(3) OJ L 100 of 20.4.2000, p. 24.
(4) OJ L 1 of 4.1.2003, p. 1
(5) DSTI/DOT (2002) 2 of 16.4.2002.

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2.2
The White Paper addresses several basic questions:
whether there is still a justification for price fixing/capacity
utilisation by liner conferences being granted a block exemp-
tion under Article 81(3) EC. The Commission concludes that in
the present market circumstances there is no justification to
maintain the block exemption to liner conferences because
stability of prices can be achieved by other less restrictive
forms of cooperation and that the four cumulative conditions
of Article 81 (3) to justify it are no longer fulfilled.

3.1.1
The Annex to the White Paper provides an analysis
regarding the compatibility of liner conferences with the four
cumulative criteria of Article 81(3) EC. However,
in recent
years where capacity utilization under EU jurisprudence is
allowed only on condition that it will not create an artificial
peak season in connection with rate increases and conference
power to fix prices has largely disappeared (3) one can argue
whether the four cumulative criteria of Article 81(3) can still be
fulfilled.

The White Paper examines whether another

2.2.1
legal
instrument covering a new business framework of cooperation
in the liner trades is appropriate. It concludes that suggestions
from stakeholders are invited on an appropriate legal instru-
ment and on an alternative cooperation framework among
liners.

2.3
The White Paper examines whether there is still a justifi-
cation for the exclusion of tramp services and cabotage from
the competition implementing rules in Regulation 1/2003. It
concludes that no credible consideration has been put forward
for a different treatment of those services from all other sectors
of the economy. It, therefore, proposes to bring these services
under the scope of procedural Regulation 1/2003.
It also
proposes that for the sake of legal certainty it will consider
issuing some form of guidance to facilitate the self assessment
of pool agreements by carriers.

2.4.
It is noteworthy that the newly established (2003) Euro-
pean Liner Affairs Association (ELAA) to deal with this topic
proposed a new business framework for liner shipping coop-
eration. Namely,
it proposes a new business framework of
discussion between lines regarding capacity utilisation, market
shares, cargo developments by trade, a price index publicly
available, discussion of surcharges/ancillary charges.

3. General comments

3.1.2
The EESC wishes to see more analysis regarding the
increasing role of outsiders since the 1980's. Data available
indicate that conferences have not hampered the emergence of
outsiders which have acquired significant shares. Hence, effec-
tive competition exists and the fourth cumulative criterion of
Article 81(3) EC is fulfilled (no elimination of competition).
Similarly, data available concerning the transport cost elements
in shelf price of consumer goods indicate that it has reached
marginal level of percentage. Therefore, one can argue about
whether there is a negative price setting by conferences upon
consumers.

3.1.3
Regulation 4056/86 was the offspring of the market
conditions prevailing in the 1980s. It is part of the package of
four maritime regulations adopted in 1986 setting the corner-
stones of the common shipping policy of the EU. The confer-
ences enjoyed a generous legal treatment for 18 years under
EU law.

3.2
The EESC remarks that whilst the Commission refers to
the international position of liner conferences and to the regu-
latory context in the US, Australia, it does not address its legal
implications. Fourteen EU Member States and Norway have
signed or acceded to the Liner Code: if Regulation 4056/86 is
repealed they will have to denounce the Code. It is noteworthy
that according to Article 50 of the Liner Code denunciation of
its provisions takes effect one year or later following receipt by
the depositary. Regulation 954/79 will have to be repealed.
‘Offers’ to the WTO would have to be modified accordingly.
The White Paper does not address the treaty law problems
emanating from an eventual abolition of the liner conferences
system. The EU will have to address the renegotiation of the
EU/Ukraine, EU/Russia agreements.

3.1
The EESC has been following closely developments
regarding this issue since the 1980s and adopted two Opinions
in 1982 (1) and in 1985 (2) the gist of which was given a
follow-up in Regulation 4056/86. Hence,
it welcomes the
White Paper and the brainstorming exercise launched by the
Commission and hopes to contribute significantly towards
arriving at a meaningful competition regime in the EU and
worldwide.

3.3
Conferences may still remain and develop legitimate
activities instead of being abolished. A conference organizes the
liner trade between developed and developing countries. If a
conference is abolished in the EU end of the trade, what will
happen to the other end of the trade? For instance, conferences
exist between EU/South America and EU/West Africa and the
Liner Code is applicable to them. The White Paper has not
addressed these problems.

(1) OJ C 77 of 21.3.1983, p. 13.
(2) OJ No. C 344 of 31.12.1985, p. 31

(3) October 2004.

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3.4
If a conference can exercise activities which are not
restrictive of competition why should the conference system be
abolished? This alternative is not explored in the White Paper.
Activities such as cargo/revenue allocation, coordination of
schedules/sailings may be passing the test of the four cumula-
tive criteria. The Dutch and German Governments in a recent
discussion paper (1) explore possible forms of cooperation and
possible legal instruments. This initiative should be taken into
account. Moreover, some other activities proposed by ELAA
and by the German and Dutch discussion paper may also be
passing the test of the four cumulative criteria. Therefore, it is
not the lifting of the existing block exemption that is a source
of concern; it is the unilateral abolition of the liner conference
system by the EU without consultation with other major indus-
trialized countries (OECD) or developing countries.

It is obvious from the above that, whilst abolition of the
3.5
block exemption may be envisaged, abolition of
the liner
conferences entails a host of legal problems which should be
addressed first. Moreover, the compatibility of the new EU
regime with the international regulatory framework has to be
achieved. A unilateral EU action is unthinkable since liner
conferences are a system existing all over the world. The White
Paper does not analyze sufficiently the international
implica-
(i.e., the international commit-
tions on the regulatory level
ments of the EU and its Member States) nor the treaty law
problems created from the abolition of liner conferences.

remain the cornerstones of

3.6
The EESC maintains that irrespective of their shortcom-
ings and outdating, the Liner Code (and the conference system
the 1986
consecrated by it)
package of four maritime Regulations constituting phase I of
the EU common shipping policy. Three out of the four regula-
tions are based on the Liner Code and make direct reference to
it. Namely, Regulation 4055/86, Regulation 4056/86 and
Regulation 4058/86 (2). The above package was the result of
painstaking negotiations for several years and created a delicate
balance of mutual concessions between Member States. Before
proceeding to the repeal of Regulation 4056/86, Regulations
4055/86 and 4058/86 would also have to be amended.

Since the conference system is currently under revision
3.7
in other jurisdictions it would be more sensible for the EU —
instead of proceeding unilaterally — to liaise with these juris-
dictions with a view to adopting a new international regime
compatible worldwide. Otherwise, whilst the US and Australia
have approached the EU system, the EU will abolish it without
consultation and coordination. This issue could also be raised
in the International Competition Network (ICN) of which the
Commission is a founding member (2001). The ICN constitutes

(1) October 2004.
(2) Regulation 4055/86 of 22.12.1986 (‘applying the freedom to
provide services to maritime transport between Member States and
between Member States and third countries’)
is based on the
UNCTAD Liner Code. Art. 4§1(a) (b) provides a phasing out of
existing cargo sharing arrangements by direct reference to the Liner
Code; Regulation 4058/86 of 22.12.86 (concerning ‘coordinated
action to safeguard free access to cargoes in ocean trades’) is based
on the Liner Code. Article 1 provides for action depending on Code
trades and non-Code trades– OJ L 378 of 31.12.1986, p. 4.

a leading forum for the discussion of international competition
policy at the multilateral level. The impact of such an abolition
would be very damaging and penalizing for European operators
who, despite fierce competition from non-EU (mainly Asian)
companies, are top-listed in the world maritime companies
ranking (the first four companies of this list being European).
For the abovementioned reasons,
the review of Regulation
4056/86 should be discussed at the level of the ICN.

The EESC is aware of the fact that such an exercise may
3.8
be time consuming. Therefore, until another system be agreed
internationally to replace the Liner Code and until a coordina-
tion between various jurisdictions takes place regarding the
replacement of the liner conference system in the regulatory
field, it proposes to repeal Regulation 4056/86 by introducing
a new Commission Regulation. The new Regulation should
provide a block exemption under strict terms complying with
the specific yardsticks of EU jurisprudence (e.g. TACA case and
other cases).

A total deregulation without a new legal instrument in
3.9
place is not an advisable course of action for additional
reasons: Under
the newly created European Competition
Network (ECN) (3) there will be a decentralisation of the hand-
ling of competition cases by national authorities. With the EU
enlargement, the ten new Member States may require advice
both on substance and procedure. There will be need for an
educational period to familiarize them with market economies
especially taking into account
the absence of competition
authorities in some of them. There will be need for a Regu-
lation providing specific yardsticks on eventual anticompetitive
practices of various forms of cooperation in the liner trades.
Otherwise, it will become a lawyers' paradise entailing a diver-
ging application of EU law in its Member States.

The EESC believes that decentralization of competition
3.10
procedures should not coincide with deregulation of the liner
system. For all these reasons, deregulation is not advisable at
this stage. Moreover, deregulation may increase concentration
and reduce the number of carriers in the market.

The White Paper proposal regarding the treatment of
3.11
the tramp and cabotage services can be accepted. It is antici-
pated that the vast majority of cases would not raise competi-
tion problems (4). For the sake of legal certainty, however, it is
sensible
legal guidance
regarding bulk pools and specialized trades in their self assess-
ment regarding their compatibility with Article 81 EC bearing
in mind that notifications of agreements and opposition proce-
dure are not allowed anymore.

the Commission to provide

for

(3) Regulation 1/2003.
(4) Indeed, the tramp services sector has been characterized as a model
sector of perfect competition: William Boyes, Michael Melvin,
‘Microeconomics’, 1999 Houghton Mifflin College, 4th Edition.

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4. Specific comments

4.1
The White Paper fails to address the regulatory safe-
guarding of the position of outsiders. It takes for granted that
there has been an increase of their market share since the
1980s and supposes that this will continue in the future. Yet,
the specific safeguards provided in Regulation 4056/86 have to
be maintained in any new Regulation to avoid curtailing of
their activities and maintain open trades.

4.2
The White Paper accepts that the repeal of the anti-trust
immunity may lead to more concentration, i.e., mergers and
acquisitions which in turn may entail a unilateral increase of
market power or greater risk of collusion due to a reduction of
market players (page 19 para. 73,74, Annex to the White
Paper). Given that there are no new entrants in the liner trades,
due to the high costs involved and the volatility of the market,
which do not guarantee results, how can the current EU
merger control Regulation safeguard the trades? It is unrealistic
to expect small and medium-size carriers struggling for survival
to undertake protracted and costly legal proceedings under the
merger Regulation to prevent mergers creating big carriers.
There should be safeguards in law.

4.3
The Commission argues (p. 17 para. 64, Annex to the
White Paper) that if the cyclical nature of the container market
remains free from collective action, it might generate a contin-
uous flow of companies entering and exiting the market. Ineffi-
cient carriers sell their vessels and new efficient companies
enter the market. This is a rather simplistic assessment of the
market. Today, we can hardly find new entrants in the liner
trades, particularly in the deep sea ones, because of the huge
costs involved and the volatility of the trades which do not
guarantee returns. Moreover, the distinction between efficient
and inefficient carriers is not correct. Inefficient carriers cannot
survive in the highly competitive liner trades.

4.4
For the reasons explained in Chapter 3, the conflict of
laws provision in Regulation 4056/86 should be maintained in
the new regulation.

5. Conclusions

5.1
The EESC welcomes the White Paper initiative and the
brainstorming exercise launched by the Commission subject to
its comments.

5.3
The EESC believes that any new regulation should not
be a Council regulation but a Commission regulation in order
to bring it in line with other EU regulations on competition
law. However, if this is accepted, the Commission should be
entrusted with checking more carefully the specificities of mari-
time transport and the international implications of the new
legal regime. The EESC considers as positive that the White
Paper invites views on alternative systems.

5.4
Traditionally in all jurisdictions, conferences have been
granted some form of immunity from the competition rules
and none of the competent authorities reviewing it (e.g. USA,
Canada, Australia, Japan) have removed that immunity so far.
The liner market is currently going through profound changes
and will continue to do so. The market shares of conferences
have declined considerably and the majority of contracts
concluded are individual service contracts which are preferred
by shippers and acknowledged by other jurisdictions. Moreover,
discussion agreements and consortia/alliances are proliferating
worldwide.

5.5
If Regulation 4056/86 is repealed without being substi-
tuted by a new regulation granting a block exemption it will
require a Herculean legal task of negotiations, renegotiations of
agreements with several third countries as well as extensive EU
legislative work
communautaire
(i.e. Regulation 954/79, Regulation 4055/86, Regulation
4058/86). Moreover, EU Member States will have to denounce
the Liner Code. The EESC urges the Commission to address all
these legal problems before examining the alternative systems
to liner conferences and the abolition of the current block
exemption.

to amend

acquis

the

5.6
In view of the host of legal problems to be created by
the abolition of conferences, the EESC urges the Commission
to undertake a legal study of the regulatory changes required, if
conferences are to be abolished by the EU and retained in the
rest of the world. Such a study will reveal that there may be no
added value in a deregulation of the liner market at present all
the more coinciding at a moment of decentralization of compe-
tition authority to the Member States. Otherwise, we will be
left with a legal vacuum without specific rules in this sector.

5.2
Any future legal framework should be compatible with
Article 81 EC and balanced, i.e., meet the demands of both
shippers and carriers. It should cater equally for the demand
and the supply side of the liner-shipping business. It should be
transparent and provide for the existence of open liner trades
(i.e., outsiders).

5.7
In the meantime, the EESC believes that there is still a
justification for maintaining the liner conferences in the EU
until a new regulatory regime is put in place worldwide. The
Conference system is therefore still necessary because it is the
basis of the regulation of liner shipping worldwide. The effects
on the international framework from an abolition of the EU
block exemption, vis-à-vis developing countries as well as other
OECD countries, will be complex and significant.

C 157/136

EN

Official Journal of the European Union

28.6.2005

5.8
The EESC maintains that Regulation 4056/86 should be
repealed and substituted by a new Commission Regulation for
liner conferences granting a block exemption. The new regime
should strictly follow the yardsticks established under the juris-
prudence of the European Court of First Instance and of the
Commission (e.g. TACA case). The conference system should
also be maintained in order to defend the competitiveness of
Community shipowners worldwide. Whilst for the large carriers
‘alliances’ and other types of cooperation agreements may be
appropriate, small and medium size carriers still need confer-
ences in order to maintain their market shares especially in
trades with developing countries. The abolition of the exemp-
tion may have anticompetitive effects for these small carriers
enhancing the dominant position of the larger ones.

5.9
Commission to monitor

This interim transitional period should be used by the
liner market developments

the

Brussels, 16 December 2004

including trends of consolidation. Moreover, the Commission
should undertake consultations with other jurisdictions (OECD)
with a view to arriving at a suitable alternative system compa-
tible worldwide.

The EESC endorses proposals of

5.10
the White Paper
regarding the treatment of tramp and cabotage services since
the vast majority of cases in these sectors would not raise
competition problems. For the sake of legal certainty, however,
the Commission is
legal guidance
regarding the self assessment of bulk pools and specialized
trades regarding their compatibility with Article 81 EC.

requested to provide

5.11
The EESC hopes to provide its assistance in the follow-
up to the brainstorming exercise launched by the White Paper.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the
European Parliament and of the Council on establishing a multiannual Community programme on
promoting safer use of the internet and new online technologies’

(COM(2004) 91 final — 2004/0023 (COD))

(2005/C 157/24)

On 26 March 2004, the Council decided to consult the European Economic and Social Committee, under
Article 153 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee's work on the subject, adopted its opinion on 5 October 2004. The rapporteur
was Mr Retureau and the co-rapporteur, Ms Davison.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 16 December 2004), the European
Economic and Social Committee adopted the following opinion by 147 votes in favour with 1 abstention:

1. Summary of the draft opinion

The Commission proposes

to launch a new Safer
1.1
Internet Programme, which is to be enhanced to reflect the
rapid development of
the Information Society in terms of
communications networks. It has therefore been named the
Safer Internet Plus Action Plan (2005-2008).

working paper (SEC(2004) 148), and in COM(2004) 91 final. It
supports broadening the scope of the new action plan and its
objectives to reflect the rapid development and diversification
of Internet access and the very rapid growth of broadband
connections.
In its general and specific comments on the
subject, the Committee offers some additional proposals for
political and regulatory measures, in particular:

— technical and legal standards (compulsory and voluntary);

Besides the proposal for a Decision of the European
1.2
Parliament and of the Council submitted by the Commission,
the Committee has examined the ex ante evaluation of Safer
in a Commission staff
Internet Plus (2005-2008), set out

— education and training of users;