Maersk, MSC along with other 13 shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe. The European Commissions will likely announce its decision next month, Reuters reports.
In November 2013, the Commission opened formal antitrust proceedings to investigate the practice of publishing General Rate Increase announcements. The Commission concerned that container liner shipping companies’ practice of publishing their future price increase intentions may harm competition and customers by raising prices for their services to and from Europe, in breach of EU antitrust rules.
The other 13 firms are No. 3 player CMA CGM, Germany’s Hapag Lloyd and Hamburg Sud, Taiwan’s Evergreen Marine, China Ocean Shipping (Group) Company (COSCO), China Shipping, OOCL (Orient Overseas Container Line), South Korean firms Hanjin and Hyundai Merchant Marine , Japan’s Mitsui OSK Lines (MOL) and Nippon Yusen Kaisha, United Arab Shipping Company (UASC) and Israeli company Zim.
In order to address the Commission’s concerns, the carriers offered the following commitments:
- the carriers will stop publishing and communicating General Rate Increase announcements, i.e. changes to prices expressed solely as an amount or percentage of the change;
- in order for customers to be able to understand and rely on price announcements, the price figures that the carriers announce will benefit from further transparency and include at least the five main elements of the total price (base rate, bunker charges, security charges, terminal handling charges and peak season charges if applicable);
- any such future announcements will be binding on the carriers as maximum prices for the announced period of validity (but carriers will remain free to offer prices below these ceilings);
- price announcements will not be made more than 31 days before their entry into force, which is usually when customers start booking in significant volumes and
- the commitments proposed by the parties include two exceptions in situations that would be unlikely to give rise to competition concerns. Namely, the commitments will not apply to: (i) communications with purchasers who on that date have an existing rate agreement in force on the route to which the communication refers and (ii) communications during bilateral negotiations or communications tailored to the needs of specific identified purchasers.
