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Competitiveness Council Ends Exemption For Liner Shipping Conferences

by Ulrika Lomas, for LawAndTax-News.com, Brussels

27 September 2006


The Competitiveness Council on Monday unanimously adopted the European Commission’s proposal to repeal the exemption from the EC Treaty’s ban on restrictive business practices (Article 81) for liner conferences on routes to and from the EU.

Liner shipping (i.e. the provision of regular, scheduled maritime freight transport, chiefly by container) has been organised in the form of cartels – called liner conferences - since the 1870s.

Liner conferences are agreements between liner shipping companies on prices and other conditions of carriage; as such they reduce competition between members of those conferences, and lead to higher prices for users.

The current block exemption allows carriers to fix prices and regulate capacity jointly. The repeal will enter into effect in October 2008.

To ensure that the new regime fosters competitive markets, the Commission will issue guidelines on the application of the competition rules to maritime transport before the end of the transitional period.

The Council also empowered the Commission to apply EC Treaty competition rules to cabotage and tramp shipping, by extending the scope of the competition implementing rules.

Internal Market Commissioner, Charlie McCreevy, who handled the proposal, stated that:

“I am delighted the Council has adopted this proposal less than a year after we presented it. The European shipping industry will benefit from the more competitive market that will result from the repeal of the block exemption and the EU economy as a whole stands to benefit from lower transport prices and more competitive exports.”

The abolition of the exemption for liner conferences will affect EU and non-EU carriers operating on routes both to and from Europe. The market distorting effects of price fixing will be corrected, and lower prices for sea containers are likely to result.


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