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EC Closes IACS Investigation

by Ulrika Lomas, Tax-News.com, Brussels

16 October 2009


The European Commission has closed its investigation of the International Association of Classification Societies (IACS). The Investigation was launched after an unannounced inspection on January 2008, on the grounds that IACS may have infringed both the EEA Treaty and EEA agreement on restrictive business practices.

The Commission's concerns related to the ship classification market, in particular that the IACS might have prevented classification societies, which are not members of the IACS, from joining the IACS, from participating in the IACS' technical working groups and from access to technical background documents. Such behavior would have hindered the entry and development of classification societies, which were not members of the IACS, in the ship classification market.

In a statement on October 13, the Commission announced that it had decided to end its investigations without giving a ruling on whether the IACS had infringed antitrust rules after the two parties, in negotiations, agreed upon commitments proposed by the IACS. Chairman of the IACS, Hermann Klein, welcomed the decision as "an excellent outcome."

Within the negotiations, the IACS offered the following commitments:

  • To set up objective and transparent membership criteria and to apply them in a uniform and non-discriminatory manner. The commitments foresee detailed rules, including clear deadlines, for the different steps of the membership application, suspension and withdrawal procedure;
  • To ensure that classification societies which are not members of IACS will nonetheless be able to participate in IACS' technical working groups; and
  • To put all current and future IACS resolutions and their related technical background documents into the public domain at the same time and in the same way as they are made available to IACS members.

Competition Commissioner Neelie Kroes commented: "This decision opens up the ship classification market to the benefit of both classification societies which are not members of IACS and customers of ship classification services. This paves the way for more competition in this market, which should generate lower prices, more customer choice and improved quality of service."

The Commission has underscored that if the IACS breaks its commitments, the Commission could impose a fine of up to 10% of the Association’s total turnover without having to prove any violation of the EC Treaty’s and the EEA Agreement’s competition rules.


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