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EC Mulls Impact Of Information Exchange Regime For Liner Shipping Sector

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

02 October 2006


The European Commission on Friday published a staff paper on the potential impact of information exchanges between liner carriers on the market for liner shipping.

The Commission is concerned that exchanges of information could lead in practice to a co-ordination of prices and other trading conditions between liner carriers.

This consultation follows the repeal of the block exemption for liner shipping conferences decided upon by the Competitiveness Council last Monday.

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 of the block exemption for liner shipping conferences will take effect in 2008.

The European Liner Affairs Association (ELAA), a liner shipping association representing around 90% of world containership capacity, has proposed that the block exemption should be replaced with an information exchange system.

The Commission has acknowledged that exchanges of information leading to greater market transparency may help improve the provision of liner services, in the interest of carriers, transport users and the public in general. To be acceptable however, any new system for information exchange must respect the competition rules.

The Commission has met with representatives of the liner shipping industry regularly during the last two years to discuss potential competition concerns of an information exchange system. The issues paper is the result of these discussions.

It sets out a preliminary view of the extent to which the ELAA’s revised proposal for an information exchange is compatible with competition rules.

According to the EC:

"Some elements of the current ELAA proposal appear to be in line with that requirement. Others are problematic notably because they do not differ in effect from what liner conferences are currently doing. Accepting the revised ELAA proposal in its current form would appear to remove all of the pro-competitive effects of the abolition of the liner conference system."

Stakeholders are invited to submit their comments by 31st October.


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