The European Commission has adopted a new Block Exemption Regulation which revises the current exemption for liner shipping consortia from the ban on restrictive business practices under Article 81 of the EC Treaty. The review of the current Block Exemption began in 2007 with a thorough market investigation, and the draft Regulation was circulated in 2008. The new Regulation will come into effect on 25 April 2010, once the current Block Exemption Regulation expires, and extends the current exemption for a further five years.
Both the new and current Block Exemption exempt liner shipping consortia which meet the conditions of the Regulation. In particular, all consortia agreements whose objective is the joint cooperation of liner shipping services in transporting cargo, will be deemed not to infringe the ban on restrictive business practices under the EC Treaty. It is worth noting, however, that consortia agreements which relate to price fixing will not be exempted under the Regulation and the Commission may still withdraw the benefit of the block exemption at any time.
The new Regulation aims to better reflect current market practices and to be more consistent with other block exemptions in relation to horizontal cooperation between companies. Key changes in the new Regulation include extending its scope to all liner shipping cargo services, prolonging the exit clauses and lock in periods and revising the list of exempted activities. More significant, however, is the reduction of the market share threshold from 35% to 30%, above which companies do not qualify for automatic exemption.
If a consortium does not fulfil the conditions of the Regulation this does not mean that such cooperation is automatically unlawful, but that the parties have to assess its compatibility with the competition rules on an individual basis.