New regulations of the Commission on Maritime Transport

Source: Euroalert

The European Commission has adopted a new exemption regulation that will enter into force on 25 April 2010. It renewes for 5 more years the existing exemptions from the ban on restrictive business practices for shipping consortia liner. This exemption allows for cooperation between companies so that they can provide a joint service in freight.

Under both the new and the current Commission Block Exemption Regulation, all consortium agreements (except for price fixing agreements) whose objective is the joint operation of liner shipping services are exempted from the EC Treaty’s ban on restrictive business practices provided they fulfil the conditions and obligations set out in the Regulation.

The new Regulation incorporates amendments as reflecting current market practices and bringing the consortia block exemption in line with other block exemption regulations for horizontal cooperation between companies. The scope of application of the new Regulation has been extended to all liner shipping cargo services, whether containerised or not. It also aspires to reflect current market practices and to harmonize the block exemption for consortia with other block exemption regulations relating to horizontal cooperation between companies

The new regulation includes some modifications regarding a reduction of market share threshold above which firms are not eligible for an automatic exemption and expanding the scope of the exemption to all services of maritime transport of goods. The Commission may withdraw the benefit of the exemption if those links are detrimental to competition.

The list of exempted activities has been revised in order to better reflect current market practices. The market share threshold has been reduced from 35% to 30% and the method of its calculation clarified. Finally, the exit-clauses and lock-in periods, in case a member wants to withdraw from the consortium, have been prolonged to better reflect current market practice but still safeguard the carriers' flexibility.

Context
Consortia allow companies to streamline its activities and achieve economies of scale. The users of transport services typically benefit from improved productivity and service quality through such a consortium. The Block Exemption Regulation for the consortium, was adopted in 1995 and renovated later in 2000 and 2005.

The revised block exemption regulation began in 2007 with a comprehensive market research. The Commission consulted third parties on a preliminary draft in autumn 2008.