Notice pursuant to Article 4 of Council Regulation (EEC) No 479/92 on the application of Article 81(3) of the EC Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies ( consortia ) (Text with EEA relevance)
Date: 2008-10-21
Institutions: European Commission
Subjects: carriage of goods, international transport, maritime transport, provision of services, restriction on competition, restrictive trade practice

21.10.2008

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Official Journal of the European Union

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II

(Information)

INFORMATION FROM EUROPEAN UNION INSTITUTIONS AND BODIES

COMMISSION

Notice pursuant to Article 4 of Council Regulation (EEC) No 479/92 on the application of
Article 81(3) of the EC Treaty to certain categories of agreements, decisions and concerted practices
between liner shipping companies (‘consortia’)

(Text with EEA relevance)

(2008/C 266/01)

In accordance with Article 4 of Council Regulation (EEC) No 479/92 (1), the Commission invites interested
parties to send their comments concerning the attached draft Commission Regulation (EC) on the applica-
tion of Article 81(3) of the EC Treaty to categories of agreements in the field of maritime transport.
Comments (reference HT.1065) should be sent within one month of the date of publication of this notice,
to:

European Commission
Directorate-General for Competition
Reference HT.1065
Unit COMP/F1, Office J70 2/55
B-1049 Brussels
Fax (32-2) 295 01 28
E-mail: COMP-GREFFE-ANTITRUST@ec.europa.eu

(1) OJ L 55, 29.2.1992, p. 3.

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‘PRELIMINARY DRAFT

COMMISSION REGULATION (EC) No [XXX]

of [XXX]

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

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(3)

Having regard to Council Regulation (EEC) No 479/92 of
25 February 1992 on the application of Article 85(3) of the
Treaty to certain categories of agreements, decisions and
companies
concerted
(consortia) (1), and in particular Article 1 thereof,

practices

shipping

between

liner

Having published a draft of this Regulation (2),

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

Whereas:

(1)

(2)

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

between

shipping

The Commission has made use of this power by adopting
Commission Regulation (EC) No 823/2000 of 19 April
2000 on the application of Article 81(3) of the Treaty to
certain categories of agreements, decisions and concerted
practices
companies
liner
(consortia) (3), which will expire on 25 April 2010. On
the basis of the Commission's experience to date it can
be concluded that the justifications for a block exemption
for liner consortia are still valid as it has been found to
function well for the benefit of carriers and transport
users. Adjustments however have to be introduced to
delete
repealed Regulation (EC)
No 4056/86 containing the liner conference block
exemption which allowed liner shipping lines to fix
prices and capacity. Modifications also target a greater
convergence between Regulation (EC) No 823/2000 and
other block exemption regulations for horizontal coop-
eration in force whilst taking into account current market
practices in the liner industry.

references

to the

(1) OJ L 55, 29.2.1992, p. 3.
(2) […].
(3) OJ L 100, 20.4.2000, p. 24.

(4)

(5)

(6)

(7)

There is a great variety of different consortia agreements
operating in the market. For the purposes of this Regu-
lation a consortium agreement should consist of one or a
set of separate but interrelated agreements under which
the parties operate the joint service. The legal form of the
arrangements
than the
underlying economic reality that the parties provide a
joint service.

is considered less

important

By contrast, this Regulation should not cover restrictive
concluded between, on the one hand,
agreements
consortia or one or more of their members, and, on the
other hand, other shipping companies. Nor should it
apply
between different
consortia operating in the same trade or between the
members of such consortia.

to restrictive

agreements

The benefit of the block exemption should be limited to
those agreements for which it can be assumed with suffi-
cient
conditions of
Article 81(3).

they satisfy the

certainty that

Consortia, as defined in this Regulation, generally help to
improve the productivity and quality of available liner
shipping services by reason of the rationalisation they
bring to the activities of member companies and through
the economies of scale they allow in the operation of
vessels and utilisation of port facilities. They also help to
promote technical and economic progress by facilitating
and encouraging greater utilisation of containers and
more efficient use of vessel capacity. For the purpose of
establishing and running a joint service, an essential
feature inherent in consortia is the ability to make capa-
city adjustments in response to fluctuations in supply
and demand. By contrast, unjustified output limitation as
well as the joint fixing of freight rates or market and
customer allocation are unlikely to bring any efficiency.
Therefore,
such
agreements
activities should be excluded from the benefit of this
Regulation,
the
parties.

the market power of

irrespective of

consortia

involve

that

A fair share of the benefits resulting from the efficiencies
should be passed on to transport users. Users of the ship-
ping services provided by consortia may benefit from the
improvements in productivity which consortia can bring
about. Those benefits may also take the form of an
improvement in the frequency of sailings and port calls,
or an improvement in scheduling as well as better quality
through the use of more
and personalised services
modern vessels and other equipment,
including port
facilities.

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(8)

(9)

(10)

(11)

(12)

Users can benefit effectively from consortia only if there
is sufficient competition in the trades in which the
consortia operate. This requirement of Article 81(3)
should be regarded as being met when a consortium
remains below a given market share threshold and can
therefore presumed to be subject to effective actual or
potential competition from non-consortium lines.
In
order to assess market shares, account should be taken
not only of direct trade between the ports served by a
consortium but also of any competition from other liner
services sailing from ports which may be substituted for
those served by the consortium and, where appropriate,
of other modes of transport.

not

should

exempt

This Regulation
agreements
containing restrictions of competition which are not
indispensable to the attainment of the objectives justi-
fying the grant of
the
activities listed in Article 4 should be excluded from the
scope of this Regulation

the exemption. To this end,

consortia in order

In addition, the benefit of the present exemption should
be subject to the fulfilment of certain conditions. In par-
ticular, consortium agreements should contain a provi-
sion enabling each shipping line party to the agreement
to withdraw from the consortium provided that it gives
reasonable notice. However, provision should be made
for a longer notice period in the case of highly integrated
to take
and/or high-investment
account of
the higher investments undertaken to set
them up and the more extensive reorganisation entailed
in the event of a member's leaving. It is justifiable for
consortia to seek security for new investments committed
to an existing service. Therefore, the possibility for the
parties to a consortium agreement
into a
“non-withdrawal” clause should also apply where the
parties to an existing consortium agreement have agreed
to make substantial new investments and the costs of
such new investments justify a new “non-withdrawal”
clause.

to enter

(13)

(14)

(15)

(16)

(17)

Such consultations are likely to secure a more efficient
operation of maritime transport services which takes
account of users'
requirements. Consequently, certain
restrictive practices which could ensue from such consul-
tations should be exempted. Such consultations should
however be limited to the conditions and the quality of
the scheduled maritime transport service provided by the
consortium or its members and exempted by this Regu-
lation.

The market share threshold,
the exclusion of certain
conduct from the benefit of this exemption as well as the
other conditions and obligations attached to it should
normally ensure that the agreements to which the block
exemption applies do not give the companies concerned
the possibility of eliminating competition in a substantial
part of the trades in question.

In particular cases in which the agreements falling under
this Regulation nevertheless have effects incompatible
with Article 81(3), the Commission may withdraw the
benefit of the block exemption.

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

In view of the expiry of Regulation (EC) No 823/2000, it
is appropriate to adopt a new Regulation renewing the
block exemption,

HAS ADOPTED THIS REGULATION:

CHAPTER I

SCOPE AND DEFINITIONS

Article 1

Scope

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

conditions

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

Article 2

Definitions

For the purposes of this Regulation:

the provision of

Certain obligations should also be attached to the exemp-
tion. In this respect, transport users should at all times be
in a position to acquaint themselves with the conditions
the maritime transport services
for
jointly operated by the members of
the consortium.
Provision should be made for real and effective consulta-
tions between the consortium and transport users on the
activities covered by the agreements. This Regulation also
specifies what is meant by “real and effective consulta-
tions” and what main procedural
stages are to be
followed for such consultations.

1. “consortium” means an agreement or a set of interrelated
agreements between two or more vessel-operating carriers
liner shipping services exclu-
which provide international
sively for the carriage of cargo, chiefly by container, relating
to one or more trades, and the object of which is to bring
about cooperation in the joint operation of a maritime trans-
port service, and which improves the service that would be
offered individually by each of its members in the absence of
the consortium, in order to rationalise their operations by
means of technical, operational and/or commercial arrange-
ments;

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

3. “service arrangement” means a contractual arrangement
concluded between one or more transport users and an indi-
vidual member of a consortium or a consortium itself under
which, in return for an undertaking to commission the trans-
portation of a certain quantity of goods over a given period
of time, a user receives an individual undertaking from the
consortium member or the consortium to provide an indivi-
dualised service which is of a given quality and specially
tailored to its needs;

forwarder) or

4. “transport user” means any undertaking (such as shipper,
representative organisations
its
consignee,
which has entered into, or demonstrated an intention to
enter into, a contractual agreement with a consortium (or
one of its members) for the shipment of goods;

5. “commencement of the service” means the date on which the
first vessel sails on the service or, when there has been
substantial new investment, the date on which the first vessel
sails under the conditions directly arising from that substan-
tial new investment;

6. “substantial new investment” means an investment which
results in the building, purchase or long-term charter of
vessels, which are specifically designed and required for the
operation of the service and which constitutes at least half of
the total investment made by the consortium members in
relation to the maritime transport service offered by the
consortium.

CHAPTER II

EXEMPTIONS

Article 3

Exempted agreements

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

The declaration of non-applicability shall apply only to the

2.
following activities:

(a) the joint operation of

liner shipping transport services

which includes any of the following activities:

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

and the determination of ports of call;

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

on vessels;

(v) the provision of containers, chassis and other equip-
leasing or purchase contracts

ment and/or the rental,
for such equipment;

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

joint documentation system;

(b) capacity adjustments in response to fluctuations in supply

and demand;

(c) the joint operation or use of port terminals and related

services (such as lighterage or stevedoring services);

(d) any other activity ancillary to those referred to in points (a)

to (c) which is necessary for their implementation.

The following clauses shall

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

in particular be considered

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

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

Article 4

Agreements not covered by the exemption

The exemption provided for in Article 3 shall not apply to
agreements which, directly or
in
combination with other factors under the control of the parties,
have as their object:

in isolation or

indirectly,

(a) the fixing of prices when selling liner services to third

parties;

(b) the limitation of capacity or sales except for the capacity
adjustments referred to in Article 3(2)(b) of this Regulation;

(c) the allocation of markets or customers.

CHAPTER III

CONDITIONS FOR EXEMPTION

Article 5

Conditions relating to market share

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

For the purpose of establishing whether this threshold is

2.
met:

(a) the market shares of carriers that provide services both indi-
vidually and within a consortium on the same relevant
market have to be aggregated;

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

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

(b) the market shares of consortia operating in the same rele-
vant market and interlinked by common membership have
to be aggregated.

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

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

Article 6

Other conditions

In order to qualify for the exemption provided for in Article 3,
all of the following conditions must be met:

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

(b) the consortium agreement must give member companies
the right to withdraw from the consortium without financial
or other penalty such as, in particular, an obligation to cease
all transport activity in the trade or trades in question,
whether or not coupled with the condition that such activity
may be resumed after a certain period has elapsed. This
right shall be subject to a maximum notice period of six
months. The consortium agreement may however stipulate
that such notice can only be given after an initial period of
maximum18 months starting from the date of entry into
force of the consortium agreement or the agreement to
make a substantial new investment in the joint maritime
service. If the date of entry into force of the agreement is
earlier than the date of commencement of the service, the
initial period shall not be more than 24 months starting
from the date of entry into force of the consortium agree-
ment or the date of entry into force of the agreement to
make a substantial new investment in the joint maritime
service. In the case of a highly integrated consortium with a
high level of investment due to the purchase or charter by
its members of vessels specifically for the purpose of setting
up the consortium, the maximum notice period shall also
be six months, but the agreement may stipulate that such
notice can only be given after an initial period of maximum
30 months starting from the date of entry into force of the
consortium agreement or the agreement to make a substan-
tial new investment in the joint maritime service. If the date
of entry into force of the agreement is earlier than the date
of commencement of the service, the initial period shall not
be more than 36 months starting from the date of entry
into force of the consortium agreement or the date of entry
into force of
to make a substantial new
investment in the joint maritime service;

the agreement

(c) neither

the consortium nor consortium members shall,
within the common market, cause detriment
to certain
ports, users or carriers by applying to the carriage of the
same goods and in the area covered by the agreement, rates
and conditions of carriage which differ according to the
loading or
country of origin or destination or port of
discharge, unless such differences in rates or conditions can
be economically justified on the basis of differences in the
costs of carriage.

CHAPTER IV

OBLIGATIONS

Article 7

Obligation to consult transport users

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

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

These consultations shall take place whenever requested

3.
by any of the above mentioned parties.

4.
The consultations must take place, except in cases of force
majeure, prior to the implementation of the measure forming
the subject of the consultation. If, for reasons of force majeure,
the members of the consortium are obliged to put a decision
into effect before consultations have taken place, any consulta-
tions requested shall take place within 10 working days of the
date of the request. Save in the case of such force majeure, to
which reference shall be made in the notice announcing the
measure, no public announcement of
the measure shall be
made before the consultations.

The consultations shall take place in accordance with the

5.
following procedural stages:

(a) prior to the consultation, details of the subject matter of the
consultation shall be notified in writing by the consortium
to the transport users or their representative organisations;

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

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

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

6.
The conditions concerning the maritime transport services
provided by the consortium and its members, including those
relating to the quality of such services and all relevant modifica-
tions, shall be made available on request to transport users at
reasonable cost and shall be available for examination without
cost at the offices of the consortium members, or the consor-
tium itself, and their agents.

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Article 8

Other obligations attached to exemption

Article 10

Withdrawal in individual cases

Any consortium claiming the benefit of this Regulation must
demonstrate at the request of the Commission or a Member
State's competition authority that the conditions and obligations
imposed by Articles 5 to 7 are fulfilled. To that end the
requesting authority shall on a case by case basis determine a
time-limit, which shall not be less than three months.

CHAPTER V

MISCELLANEOUS PROVISIONS

Article 9

Professional secrecy

Information acquired as a result of

1.
the application of
Article 8 shall be used only for the purposes of this Regulation.

The Commission and the authorities of

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

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

The Commission may withdraw the benefit of this Regu-
1.
lation, in accordance with Article 29 of Council Regulation (EC)
No 1/2003 (1), where it finds in a particular case that an agree-
ment, decision by an association of undertakings or concerted
practice to which Article 3 of this Regulation applies neverthe-
less has certain effects which are incompatible with Article 81(3)
of the Treaty in particular where:

(a) in the relevant market where the consortium operates, the
consortium members are not subject to effective competi-
tion, actual or potential, from shipping lines, which are not
members of the consortium;

(b) consumers do not receive a fair share of the benefits gener-
ated by the consortium in particular if it fails repeatedly to
comply with the obligations to consult provided for in
Article 7 of this Regulation.

2. Where, in any particular case, an agreement, decision by
an association of undertakings or concerted practice referred to
in paragraph 1 has effects which are incompatible with
Article 81(3) of the Treaty in the territory of a Member State, or
in a part thereof, which has all the characteristics of a distinct
geographic market, the competition authority of that Member
State may withdraw the benefit of this Regulation in respect of
that territory.

Article 11

Entry into force

This Regulation shall enter into force on 26 April 2010.

It shall apply until 25 April 2015.

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

(1) OJ L 1, 4.1.2003, p. 1.