|May 24, 2012|
Previously published on May 23, 2012
On 4 May 2012, the European Commission (the “Commission”) announced its preliminary intention not to renew its sector-specific guidelines on the application of the European Union (“EU”) competition rules to maritime transport services (the “Maritime Guidelines”). As a prelude to implementation, the Commission has issued a working paper setting out its position and has initiated a consultation requesting comments from interested parties by 27 July 2012.
By way of background, the Maritime Guidelines were adopted by the Commission in 2008 as a result of intense lobbying by stakeholders following the repeal the longstanding EU antitrust exemption for container shipping conferences set out in the liner shipping block exemption regulation. The Maritime Guidelines have an in-built expiry date of 26 September 2013.
The Commission has indicated that it does not consider retention of sector-specific guidelines for maritime transport as being necessary. The main reasons given for this position are summarised below.
1 Mission accomplished
According to the Commission, the main purpose of the Maritime Guidelines “[...] was to facilitate the operators' transition to a new era of competition and self-assessment in the liner shipping sector.”
In essence, the Commission considers that this new era has already dawned. It also considers the five-year period (preceded by a two-year transition period) during which the Maritime Guidelines will have been existence at the time of expiry, as being sufficient for market participants to have reviewed their commercial arrangements with competitors and, if necessary, adapted their conduct to ensure compliance with EU competition law.
The Commission points out that the Maritime Guidelines overlap with a number of other Commission guidelines generally applicable to all industry sectors. In part, such general guidelines are now more up-to-date than the Maritime Guidelines. Letting the Maritime Guidelines lapse would, in the Commission’s view, increase clarity and legal certainty and result in simplification via the elimination of unnecessary duplication.
In a further indication that the long-standing “special” treatment of maritime transport has come to an end, the Commission states that “[...] all the legal materials necessary to conduct antitrust self-assessments in the maritime transport sector today can be found in those general guidelines.”
3 Stream-lining competition policy
In recent times, the Commission has sought to phase-out aged sector-specific competition regimes that were prevalent during the early years of the EU’s competition policy. Today, very few sectors continue to “benefit” from sector-specific rules and their number is rapidly decreasing.
The Commission has reiterated that “[...] bringing maritime transport within the generally applicable competition law framework has been in the last years an objective of the Commission's competition policy.” The repeal of the liner shipping block exemption regulation in 2006 was the key step in achieving the Commission’s goal. Letting the Maritime Guidelines lapse and applying guidance applicable to other industry sectors is the logical next step.
Whilst this matter is still technically under consultation, it is a racing certainty that the Commission will not renew the Maritime Guidelines.
The Commission’s “preliminary” position is unsurprising. Given its druthers it would never have issued the Maritime Guidelines in the first place. The practical effect of letting the Maritime Guidelines lapse would, however, be limited. Firstly, they are simply a summary of existing general guidelines, EU case law and Commission practice - much of which has recently been updated. Secondly, such guidelines are in any event not legally binding. Strangely, therefore, the lapsed Maritime Guidelines would continue to provide stakeholders as much legal protection, in the form of guidance as to Commission thinking, dead as they did when they were live. However, their value will fade over time as the generally applicable guidelines and relevant case law develops.
It is now crystal clear that the Commission considers that the maritime transport sector is a sector like any other. Further, the Commission clearly believes that market participants have now had more than enough time to self-assess their commercial arrangements with competitors and, if necessary, adapt them to ensure compliance with EU competition law.
That said, since the repeal of the liner shipping block exemption, the Commission has subjected the maritime transport sector to relatively little scrutiny. Whether the Commission’s latest pronouncement is a sign of things to come by way of an uptick in regulatory activity remains to be seen. In this context, the outcome of the one known ongoing Commission investigation into the industry (launched in May 2011 in relation to the container liner shipping sector) will likely be instructive as to a potentially more aggressive approach by the Commission. Many have cried wolf before. But that does not mean that wolves do not exist.