Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Container liner shipping companies submit pricing practice commitments to EC, (Feb 16, 2016)

By Greg Hammond, J.D.

Fifteen container liner shipping companies have agreed to stop publishing and communicating their intended future increases of freight prices, according to commitments offered to quell European Commission concerns that the conduct violated EU and European Economic Area (EEA) competition rules against concerted practices between companies.

Container liner shipping, according to an EC announcement, is the transport of containers by ship at a fixed time schedule on a specific route between a range of ports at one end and another range of ports at the other end.

The EC initiated proceedings in November 2013 and November 2015 against the 15 companies that now offer commitments, including China Shipping, CMA CGM, COSCO, Evergreen, Hamburg Süd, Hanjin, Hapag Lloyd, HMM, Maersk, MOL, MSC, NYK, OOCL, UASC, ZIM. In particular, the EC has concerns that the price announcements—or General Rate Increase announcements—do not provide full information on new prices to customers, but allows carriers to explore each other’s pricing intentions and coordinate their behavior.

According to the terms of the proposed commitments, (1) the carriers will stop publishing and communicating General Rate Increase announcements; (2) the price figures that the carriers do announce will have further transparency by disclosing the total price, base rate, bunker charges, security charges, terminal handling charges, and applicable peak season charges; (3) any future price announcements will be binding on the carriers as maximum prices for the announced period; and (4) price announcements will not be made more than 31 days before their entry into force.

There are two exceptions, however. First, the commitments will not apply to communications with purchasers who have an existing rate agreement in force at the time of the communication with regard to the route to which the communication refers. Second, communication during bilateral negotiations or communication tailored to the needs of specific identified purchasers.

The EC is seeking comments and observations on the proposed commitments from interested third parties.

News: Antitrust