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Final Guidelines on application of Article 81 of the EC Treaty to maritime transport services

This is a follow up to my report of 17 September 2007.

On the 1st July 2008 the Commission issued final Guidelines on the application of Article 81 EC to maritime transport services.

By virtue of Council Regulation 1419/2006, three fundamental changes were introduced in the maritime transport services market in the EU related trades. First, block exemption for liner conferences was repealed (for the existing conferences, as of 18 October 2008). This means that liner shipping service providers are no longer allowed to create legitimate cartels which fix tariff rates, share markets and restrict capacity. Should liner carriers wish to enter into cooperation in future, they will have a duty of self-assessment in line with competition rules of the EC Treaty and Council Regulation 1/2003. In particular, they will have the burden of proving that their cooperation (assuming it restricts competition), is still compatible with Article 81, paragraph 3 – the exemption conditions. Container carriers represent a large part of liner vessels (i.e. sailing on predetermined routes and schedules). It can therefore be expected that increased competition in the liner shipping market will bring about positive results not only for customers of liner carriers but also for end consumers of goods carried in containers.

Second, “tramp” services have finally come within the scope of EC procedural rules of competition. Tramp shipping relates to sea carriage which is not regular but instead vessels are chartered on a case by case basis. Oil tankers, chemical and agricultural products are carried by tramp carriers.  Conduct of tramp carriers which may have anticompetitive impact are e.g., pool agreements. Such agreements are rather diverse. Basically, different shipowners bring together their vessels in a pool administrated by an appointed entity in order to jointly provide shipping services. This may imply market sharing between them, price fixing and other restrictions of competition. Earlier tramp services were outside the generally applicable EU procedural framework.

Third, cabotage shipping (shipping within the same Member >State) have also been made subject to EU procedural framework.

The Guidelines are by no means meant to supercede the case law of the European Court of Justice/CFI. Neither are they designed as an alternative to the previously existing exemption from the cartel prohibition rule. The Commission merely clarifies its opinion on certain matters concerning application of Article 81 of the EC treaty – inter alia, relevant market definition, information exchange agreements and pool agreements.

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