Following a public consultation held earlier this year, the EU Commission has announced the extension of the block exemption providing antitrust immunity to certain cooperative agreements between shipping lines until 2020.
We have not yet seen the new Regulation; however, the Commission has confirmed that there have been no amendments to the block exemption and it has only been extended. For the link to the Commission press release, please see here.
Shipping lines can continue to jointly cooperate in the provision of sea cargo transportation services as long as they are within the 30% market share threshold. Those falling outside the market share have to demonstrate that the cooperation provides sufficient competition including on pricing, and efficiencies in terms of productivity and quality.
The EU Commission has ignored requests to amend Article 5 which requires market share calculations based on volume rather than other alternatives as mentioned in the now expired Maritime Guidelines. This means lines seeking protection from the block exemption will continue to rely on the services of CTS and others to access the required data. The extended block exemption also does not distinguish between high and low volume markets. Thus the exemption is applied regardless of the characteristics of the relevant market.
Following speculation that the block exemption may be extended for only three years, or that it would be the final extension, this news will be welcomed by members of the shipping community seeking certainty on existing and proposed cooperative agreements.
Client Alert 2014-180