2000/627/EC: Commission Decision of 16 May 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty (IV/34.018 - Far East Trade Tariff Charges and Surcharges Agreement (FETTCSA)) (notified under document number C(2000) 1170) (Only the Danish, English, French and German texts are authentic)

• Published date: 20 October 2000
• Subject Matter: Competition,Agreements, decisions and concerted practices
• Official Gazette Publication: Official Journal of the European Communities, L 268, 20 October 2000

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2000/627/EC: Commission Decision of 16 May 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty (IV/34.018 - Far East Trade Tariff Charges and Surcharges Agreement (FETTCSA)) (notified under document number C(2000) 1170) (Only the Danish, English, French and German texts are authentic)

Official Journal L 268 , 20/10/2000 P. 0001 - 0034

Commission Decision

of 16 May 2000

relating to a proceeding pursuant to Article 81 of the EC Treaty

(IV/34.018 - Far East Trade Tariff Charges and Surcharges Agreement (FETTCSA))

(notified under document number C(2000) 1170)

(Only the Danish, English, French and German texts are authentic)

(2000/627/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation No 17 of 6 February 1962, first Regulation implementing Articles 85 and 86 of the Treaty(1), as last amended by Regulation (EC) No 1216/1999(2), and in particular Article 3(1) and Article 15(2) thereof,

Having regard to Council Regulation (EEC) No 1017/68 of 19 July 1968 applying rules of competition to transport by rail, road and inland waterway(3), as last amended by the Act of Accession of Austria, Finland and Sweden, and in particular Article 11(1) and Article 22(2) thereof,

Having regard to Council Regulation (EEC) No 4056/86 of 22 December 1986 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport(4), as amended by the Act of Accession of Austria, Finland and Sweden, and in particular Article 11(1) and Article 19(2) thereof,

Having regard to the Commission's decision of 19 April 1994 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission and to present any other comments in accordance with Article 19 of Regulation No 17, Article 26 of Regulation (EEC) No 1017/68, Article 23 of Regulation (EEC) No 4056/86 and Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty(5),

Having consulted the Advisory Committee on Restrictive Practices and Monopolies, the Advisory Committee on Restrictive Practices and Monopolies in the Transport Industry and the Advisory Committee on Agreements and Dominant Positions in Maritime Transport,

Whereas:

SUMMARY

(1) In this Decision, the Commission finds that the parties to the Far East Trade Tariff Charges and Surcharges Agreement (FETTCSA) infringed Article 81(1) of the EC Treaty and Article 2 of Regulation (EEC) No 1017/68 by agreeing not to discount from published tariffs for charges and surcharges. The agreement not to discount is not capable of exemption under Article 81(3) and Article 5 of Regulation (EEC) No 1017/68. The Commission imposes fines for the infringement.

(2) The minutes of the meetings quoted in recitals 40 to 54 show that the parties discussed possible ways of aligning the practices of the members of the Far East Freight Conference with those of their principal non-conference competitors concerning charges and surcharges. Such discussions within the framework of the FETTCSA went beyond activities consistent with a "technical agreement" within the meaning of Article 2(1) of Regulation (EEC) No 4056/86 and Article 3(1) of Regulation (EEC) No 1017/68. Any agreement resulting from such discussions would constitute an infringement of Article 81 of the EC Treaty. The minutes do not show that a specific agreement was recorded other than the agreement not to discount, and the present Decision makes no finding of an infringement in relation to the parties' discussions about the tariff currency, and about charges and surcharges.

THE FACTS

1. INTRODUCTION

(3) The Far East Trade Tariff Charges and Surcharges Agreement (FETTCSA) was an agreement dated 5 March 1991 between shipping lines operating on the north Europe/Far East trade. The FETTCSA came into force on 4 June 1991.

(4) The FETTCSA parties claimed that the "object of the Agreement is to improve the operational functioning of the maritime transport industry by introducing greater transparency and functional clarity in charges and surcharges and by achieving the standardisation of methodology and in their calculation".

(5) On 15 July 1991 the European Shippers' Councils lodged a formal complaint with the Commission against the FETTCSA.

(6) On 28 September 1992 the Commission's Directorate-General for Competition informed the FETTCSA parties of its view that the FETTCSA fell within Article 85(1) (now Article 81(1)), that it was not a "technical agreement" within the meaning of Article 2(1) of Regulation (EEC) No 4056/86 and that it should be notified in order to allow the Commission to decide whether an individual exemption might be granted.

(7) On 19 April 1994 the Commission adopted a Statement of Objections.

(8) On 26 May 1994 the Commission was informed that the FETTCSA parties had terminated the agreement on 10 May 1994. The Commission has been told that the last meeting of the FETTCSA parties was held on 8 September 1992.

(9) The FETTCSA has not been notified to the Commission for an individual exemption, the parties considering that it is a technical agreement falling within Article 2 of Regulation (EEC) No 4056/86.

(10) The Commission considers that the FETTCSA falls within the scope of application of Regulation No 17 and Regulation (EEC) No 1017/68 as well as Regulation (EEC) No 4056/86.

2. THE PARTIES

2.1. Parties to the FETTSCA

(11) The parties to the FETTCSA were all shipping lines. There were initially 20 members: 14 were members of the Far Eastern Freight Conference (FEFC) whilst six were independent shipping lines operating in the same trades (see below).

>TABLE>

(12) The Statement of Objections was addressed to 18 members of the FETTCSA: those listed above except Ben Line and EAC. The Commission was informed on 14 July 1992 that Ben Line ceased shipping activities on 2 July 1992. The Commission was (in the East Asia Trades Agreement proceedings, see recitals 19, 20 and 21) informed on 23 July 1993 that the East Asiatic Company and EACBen Container Line Ltd no longer operate vessels on the trades in question, although for a while the vessels they had operated were maintained in use on the same trades by Maersk.

(13) Since January 1991, DSR and Senator operated a joint service in the north Europe/Far East trades and, in 1994, they merged. In 1994, CGM left the north Europe/Far East trade and, in 1996, it was purchased by Compagnie Maritime d'Affrètement. In 1997, Nedlloyd Lijnen BV and P & O Containers Limited merged to form P & O Nedlloyd Container Line Ltd, Hapag-Lloyd AG transferred its containerised liner shipping activities to Hapag Lloyd Container Linie GmbH, and Hanjin acquired control of DSR Senator Lines GmbH.

(14) In considering the FETTCSA, it is relevant to consider not only the parties to the agreement at the relevant time but also the structure of the market. In particular it is significant that many of the FETTCSA parties were members of the FEFC and that all the parties to the FETTCSA were parties to the EATA. Membership of the FETTCSA parties to these other agreements is set out in Table 1 below.

Table 1: Market structure in 1993

>TABLE>

2.2. The Far Eastern Freight Conference(6)

(15) The FEFC is an association of shipping lines which operate liner shipping services on routes between Europe and the Far East. The FEFC does not itself offer any shipping service or enter into contracts with shippers or other customers. It regulates a number of conditions, including tariffs, on the basis of which its member lines offer their services. The FEFC is used by its member lines as a central body for publishing their decisions and communicating with other relevant organisations, including shippers' councils.

(16) Under Article 3 of Regulation (EEC) No 4056/86 (the block exemption for liner conferences), the members of the FEFC are permitted to operate under uniform or common rates for the provision of liner maritime transport services.

(17) The members of the FEFC also agree on the levels of charges and surcharges that were the subject of the FETTCSA. This Decision deals only with the extension to the independent lines of the FEFC lines' decision, in relation to charges and surcharges, not to grant discounts. To the extent that the FEFC's charges and surcharges relate to maritime transport services, they fall within the block exemption for liner conferences. This Decision does not address the question whether agreements fixing the amount of charges and surcharges relating to port handling services fall within the scope of the block exemption. As regards inlands transport services, the Commission has previously decided that price-fixing agreements relating to such services fall outside the scope of the block exemption(7).

(18) In 1991 the members of the FEFC had a 58 % market share for traffic between northern Europe and the Far East.

2.3. East Asia Trades Agreement(8)

(19) The EATA was an agreement dated 27 August 1992 between all the major shipping lines on the Europe/Far East trade, including 12 members of the FEFC and seven non-conference lines operating in the trades(9). According to the EATA Secretary(10), the FETTCSA emerged in March 1991 as a result of discussions by various shipping lines concerning the forerunner to the EATA, the European Stabilisation Agreement (ESA).

(20) The EATA provided for the exchange of information relating to capacity and the setting-up of a capacity management programme under which the parties agreed not to use part of their capacity. The express purpose of the EATA was to reduce price competition between the parties to the EATA by artificially limiting the liner shipping capacity made available to shippers wishing to...