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EU To Extend Consortia Block Exemption

by Ulrika Lomas,, Brussels

04 March 2014

The European Commission has invited comments on a proposal to prolong an exemption of liner shipping consortia from the application of EU antitrust rules, which prohibit certain agreements between companies.

The maritime consortia block exemption regulation allows shipping lines to enter into cooperation for the purpose of providing a joint service, so called "consortia."

A consortium is a grouping of shipping lines which co-operate to provide joint maritime cargo transport services. Such agreements usually allow liner shipping carriers to rationalize their activities and achieve economies of scale. If consortia are faced with sufficient competition and are not used to fix prices or share the market, the users of the services provided by consortia usually benefit from improvements in productivity and service quality. The Commission has therefore exempted such agreements from the prohibition in Article 101 of the Treaty on the Functioning of the European Union (TFEU), provided that they do not exceed a certain market share.

In light of the comments received, the Commission will adopt a new Regulation before the expiry of the current Regulation in April 2014.

The first consortia block exemption Regulation was adopted in 1995, and has been prolonged several times. The latest market investigation, conducted in 2013, showed that the main tenets of the Commission's approach are still valid. For consortia and alliances exceeding the market share foreseen in the block exemption regulation, the Commission has confirmed that it will continue to closely monitor market developments and the conduct of companies to ensure that markets remain open and competitive.

The draft Regulation, published for consultation, proposes to continue to exempt consortia under the existing legal framework for an additional five-year period until April 2020.

TAGS: marine | European Commission | agreements | regulation | services | Europe

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