Brussels says no plans to ease liner antitrust rules
Calls from some shipowners for a temporary respite from Europe’s strict competition rules during the current crisis are being brushed aside by Brussels.
Senior European Commission officials are making it clear that there are no plans whatsoever to bring back conferences in any form, despite pleas from several industry leaders in recent weeks.
That position was re-stated by Hubert de Broca, deputy head of the Competition Directorate’s antitrust unit covering transport and post, in response to claims that abolition of the conference system in Europe had compounded the dreadful market conditions experienced over the past year.
“DG Competition is not considering the possibility of restoring the bloc exemption for conferences,” Mr de Broca told the European Maritime Law Organisation’s annual conference.
Rate-setting conferences lost their immunity from European Union competition law in October 2008, just as the container trades were heading into the deepest recession ever experienced. Freight rates plunged, with lines no longer having the legal freedom to take collective action in an effort to force them back up.
Most lines believe that conferences would have been powerless to withstand market pressures as demand collapsed, but CMA CGM chairman Jacques Saadé broke ranks last month to describe European maritime regulation as “penalising, irrational and unjustified”, and accuse Brussels of handicapping European lines in the global market.
Tung Chee-chen, head of Orient Overseas (International) Ltd, which owns container line OOCL, has also said that the price war that devastated the liner trades earlier in the year could have been averted if conferences still existed in Europe. He urged Brussels to show some leniency so that the whole industry could work together to manage capacity.
“Our belief is that the existing platforms for discussion of industry issues should be extended further,” Mr Tung wrote in a recent essay. “While the industry is suffering to such a drastic extent, our goal should be to work with governments to provide our industry with the ability to collectively discuss capacity management and rationalisation, for a period of, say, one year.”
But antitrust regulators in Brussels see no merit in the conference system that was finally outlawed in Europe 12 months ago after years of resistance from the liner shipping industry.
Far from having second thoughts about whether the ban was right, the commission is urging other jurisdictions to follow suit.
Crisis conditions are not regarded by Brussels as justification for any sort of cartel, a view stated repeatedly by competition commissioner Neelie Kroes who advocates zero tolerance towards anti-competitive practices.
Separately, Mr de Broca assured liner shipping companies that no decision had been taken as to whether the bloc exemption for consortia would be extended beyond 2015. A new five year regulation covering shipping consortia will come into effect next April, and there had been speculation that this may be the last.
But having only just completed a lengthy review before publishing the final text of Regulation 906/2009 late last month, Mr de Broca said it was far too soon to say what may happen beyond 2015.
Senior European Commission officials are making it clear that there are no plans whatsoever to bring back conferences in any form, despite pleas from several industry leaders in recent weeks.
That position was re-stated by Hubert de Broca, deputy head of the Competition Directorate’s antitrust unit covering transport and post, in response to claims that abolition of the conference system in Europe had compounded the dreadful market conditions experienced over the past year.
“DG Competition is not considering the possibility of restoring the bloc exemption for conferences,” Mr de Broca told the European Maritime Law Organisation’s annual conference.
Rate-setting conferences lost their immunity from European Union competition law in October 2008, just as the container trades were heading into the deepest recession ever experienced. Freight rates plunged, with lines no longer having the legal freedom to take collective action in an effort to force them back up.
Most lines believe that conferences would have been powerless to withstand market pressures as demand collapsed, but CMA CGM chairman Jacques Saadé broke ranks last month to describe European maritime regulation as “penalising, irrational and unjustified”, and accuse Brussels of handicapping European lines in the global market.
Tung Chee-chen, head of Orient Overseas (International) Ltd, which owns container line OOCL, has also said that the price war that devastated the liner trades earlier in the year could have been averted if conferences still existed in Europe. He urged Brussels to show some leniency so that the whole industry could work together to manage capacity.
“Our belief is that the existing platforms for discussion of industry issues should be extended further,” Mr Tung wrote in a recent essay. “While the industry is suffering to such a drastic extent, our goal should be to work with governments to provide our industry with the ability to collectively discuss capacity management and rationalisation, for a period of, say, one year.”
But antitrust regulators in Brussels see no merit in the conference system that was finally outlawed in Europe 12 months ago after years of resistance from the liner shipping industry.
Far from having second thoughts about whether the ban was right, the commission is urging other jurisdictions to follow suit.
Crisis conditions are not regarded by Brussels as justification for any sort of cartel, a view stated repeatedly by competition commissioner Neelie Kroes who advocates zero tolerance towards anti-competitive practices.
Separately, Mr de Broca assured liner shipping companies that no decision had been taken as to whether the bloc exemption for consortia would be extended beyond 2015. A new five year regulation covering shipping consortia will come into effect next April, and there had been speculation that this may be the last.
But having only just completed a lengthy review before publishing the final text of Regulation 906/2009 late last month, Mr de Broca said it was far too soon to say what may happen beyond 2015.