Regulation 2009/906 - Application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) - Main contents

Exemption for certain agreements between liner shipping companies (‘consortia’)

SUMMARY OF:

Regulation (EC) No 906/2009 on the application of EU competition rules to certain agreements, decisions and concerted practices between liner shipping companies

Article 101 of the Treaty on the Functioning of the European Union (TFEU)

WHAT IS THE AIM OF THE REGULATION AND OF ARTICLE 101 TFEU?

Article 101(1) TFEU prohibits all agreements between businesses and concerted practices which may affect trade between EU countries and which seek to prevent, restrict or distort competition within the EU’s single market.

However, Article 101(3) TFEU allows for certain cases where Article 101(1) may be declared inapplicable where agreements may have certain social or consumer benefits, result in greater efficiency and do not distort competition.

The regulation concerns consortia* providing international liner shipping* services between EU ports and exempts their specific agreements, decisions and practices from the EU’s competition rules.

KEY POINTS

Exempted agreements

The following consortium activities are permitted:

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  the joint operation of liner shipping services;
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  capacity adjustments in response to supply and demand fluctuations;
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  the joint operation of port terminals and services such as stevedoring (a stevedore is a waterfront manual labourer who is involved in loading and unloading ships, trucks, trains or airplanes);
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  other activities ancillary to those listed above, that are necessary for their implementation, such as not allowing members of a consortium to assign or charter space to other vessel-operating carriers in the same market except with the prior consent of the other members of the consortium.

Hardcore restrictions

The exemption above does not apply to a consortium that, directly or indirectly, alone or together with other factors under the control of the parties, seeks to:

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  fix prices when selling liner shipping services to non-members of the consortium;
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  limit capacity or sales except when allowed as above;
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  allocate markets or customers.

Conditions for exemption

To qualify for the exemption, the combined market share of the consortium members in the relevant market in which the consortium operates must not exceed 30%, calculated by reference to the total volume of goods carried by the members within or outside the consortium. To qualify for the exemption, members of the consortium must have the right to withdraw from the consortium, subject to a maximum period of notice of 6 months, without any penalty, financial or otherwise. In the case of a highly integrated consortium, the maximum period of notice can be extended to 12 months.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 26 April 2010. Its validity, originally until 25 April 2015, was extended by Regulation (EC) No 697/2014 until 25 April 2020.

BACKGROUND

This regulation replaces Regulation (EC) No 823/2000 which expired on 25 April 2010. Although the justifications for a block exemption*for liner consortia are still valid, Regulation 906/2009 ensures a greater convergence with other existing block exemption regulations for horizontal cooperation whilst taking into account current market practices in the liner industry.

For more information, see:

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  Antitrust: Commission extends validity of special competition regime for liner shipping consortia until April 2020 — Press release (European Commission).

KEY TERMS

Consortium: an agreement or a set of interrelated agreements between 2 or more vessel-operating carriers which provide joint international liner shipping services exclusively for the carriage of cargo relating to one or more trades.

Liner shipping: regular paid transport of goods on a particular route according to timetables and sailing dates advertised in advance.

Block exemption: as a general rule, under EU competition law , agreements between companies which may be detrimental to trade and intentionally restrict or distort competition are prohibited. However, certain categories of agreements whose pro-competitive benefits outweigh their anti-competitive effects may be exempted provided that they meet specific conditions.

MAIN DOCUMENTS

Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title VII — Common rules on competition, taxation and approximation of laws — Chapter 1 — Rules on competition — Section 1 — Rules applying to undertakings — Article 101 (ex Article 81 TEC) (OJ C 202, 7.6.2016, pp. 88-89)

Commission Regulation (EC) No 906/2009 of 28 September 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) (OJ L 256, 29.9.2009, pp. 31-34)

Successive amendments to Regulation (EC) No 906/2009 have been incorporated into the basic text. This consolidated version is of documentary value only.

last update 16.03.2018

This summary has been adopted from EUR-Lex.