Shipping in a Competition Law Context

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Shipping in a Competition Law Context

• GORRISSEN FEDERSPIEL KIERKEGAARD
• BIMCO Centenary General Meeting
• 25 May 2005
• Jan Erlund

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Introduction

• Why is this topic important to us?
• Affects every-day business
• Huge fines
• Image

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Structure of presentation

• General introduction to EU Competition Law
• Competition law pitfalls within the shipping
  industry
• Public procurement and State aid

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1. General introduction

• Purpose of the EU competition law regime
• Protect competition
• Market integration (one single European market)

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Articles 81 and 82

• Article 81
• Agreements concerted practices
• Affect trade between EU Member States
• Prevent, restrict or distort competition within
  the Common Market
• Article 82
• Abuse (unilateral)
• Dominant position
• By one or more undertakings (collective dominance)

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Article 81

• Article 81 (1)
• Prohibition of agreements, which have as object
  or effect to restrict competition
• Horizontal and vertical agreements
• Article 81 (3)
• Individual exemption (self assessment)
• Block exemption

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Article 82

• Article 82
• Dominant position
• Abuse
• No exemption

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2. Competition law within the shipping industry,
current status

• Starting point Articles 81 and 82 apply to all
  industries, including maritime transport
• Tramp shipping and cabotage
• The Commission does not have any of its normal
  powers of investigation and enforcement
• Liner shipping
• The Commission has all of its normal powers of
  investigation and enforcement
• Block exemption for liner conferences, which
  permits inter alia price fixing and capacity
  regulation under certain circumstances
• Block exemption for liner shipping consortia

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Competition law within the shipping industry,
review

• Commission review of the current competition
  regime within maritime transport
• Proposal to repeal the block exemption for liner
  conferences
• Proposal to include tramp and cabotage services
  under the procedural rules
• Time frame for the review
• No new legislative proposal expected before 2007

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3. Articles 81 and 82 in the shipping industry

• Pricing agreements
• Block exemption
• Far Eastern Freight Conference
• Capacity management
• Block exemption
• Far Eastern Freight Conference etc.
• Collective dominance
• Compangnie Maritime Belge
• Cartel
• Odfjell, JO Tankers and Stolt-Nielsen

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This should be avoided
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4. Public procurement

• Public procurement
• Purchase of goods or services by public bodies
• Transparent, open procedures ensuring fair
  conditions of competition
• Below thresholds not comprised by public
  procurement directives non-discrimination and
  transparency
• 2004, new directives
• Simplification and modernisation
• Damages
• Storebaelt Bridge

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State aid

• Articles 87-92
• Prohibits measures, which distorts competition
  and trade
• Except under certain circumstances

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State Aid

• Maritime transport
• Historical background
• Competition from vessels registered outside of
  the EU
• The introduction of various arrangements for
  aiding the shipping industry, e.g. international
  registers

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State Aid

• Commission guidelines
• Background
• Objectives
• Maintaining the EU-flagged fleet
• Ensuring a level playing field
• Improving safety and the environment
• Scope
• maritime transport
• Towing?
• Dredging?

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State Aid

• Favourable tax treatment
• Tax relief measures and tonnage tax
• Flag-link
• Shipping companies and under certain
  circumstances - ship management companies
• Reduction of labour-related costs
• Short Sea Shipping
• No safe harbour

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• Closing remarks