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Despite the above competition law concerns, the EU recognises the beneficial role of the liner consortia to EU trade, mainly due to the tacit acknowledgement that joint ventures may in fact produce efficiencies and improvements outweighing possible anti-competitive effects. In general terms, EU Competition Law accepts that partial function joint ventures among liner companies, with the purpose of rationalisation of service, do produce quality in maritime transport services. It is on these grounds that liner consortia are being granted Block Exemption, by virtue of Commission Regulation (EC)

subject for future research (see Concluding Remarks). Nonetheless, we accept that port slots do constitute a reliable indicator of market power within a certain trade.

34 906/2009⁴⁴, from the EU competition law rules. The adoption of Regulation (EC) No 906/2009 on the application of Article 101(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia), i.e.

the “Consortia Regulation”, will be in effect until the 25^th April 2015.

Whether it shall it be renewed cannot be predicted with any certainty.

Exemptions in liner consortia have been preserved, in contrast to the liner conferences that have been abolished in the EU.⁴⁵

The new exemption will last until April 2015. Under these new perspectives, however, one can reasonably assume that consortia will be legitimated beyond this term, unless radical market developments take place (such as a huge market concentration in the liner shipping sector which makes joint liner services no longer necessary).

Apart from consortia, is there any room to manoeuvre left for shipping lines to enter into cooperative agreements? Munari (2012)⁴⁶ holds that liner consortia (as protected as well by the block exemption) and similar horizontal agreements among undertakings are always very difficult to justify under competition law.

However paradoxical the measure of a block exemption might have been, the EU legislation recently (2009) renewed this exemption from Community competition rules provided that the companies concerned

44 Commission Regulation (EC) No 906/2009 of 28 September 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) [OJ L 256, 29.9.2009], p. 31–34

45 Article 5 of the Regulation (EC) No 906/2009 stipulates: “For the purpose of establishing and running a joint service, an essential feature inherent in consortia is the ability to make capacity adjustments in response to fluctuations in supply and demand. By contrast, unjustified limitation of capacity and sales as well as the joint fixing of freight rates or market and customer allocation are unlikely to bring any efficiency. Therefore, the exemption provided for in this Regulation should not apply to consortium agreements that involve such activities, irrespective of the market power of the parties.”

46 Munari Francesco (2012) op. cit. §26 p. 22

35 must not foreclose competitors in a substantial part of the trades in question.

Article 3 of the Regulation⁴⁷ provides that the following activities of a consortium are subject to exemption:

i. the joint operation of liner shipping services including any of the following activities:

a. the coordination and/or joint fixing of sailing timetables and the determination of ports of call;

b. the exchange, sale or cross-chartering of space or slots on vessels;

c. the pooling of vessels and/or port installations;

d. the use of one or more joint operations offices;

e. the provision of containers, chassis and other equipment and/or the rental, leasing or purchase contracts for such equipment;

ii. capacity adjustments in response to fluctuations in supply and demand;

iii. the joint operation or use of port terminals and related services (such as lighterage between vessels or stevedoring services);

any other activity ancillary to those referred to in points i (a), i (b) and i (c) which is necessary for their implementation, such as:

the use of a computerised data exchange system;

iv. an obligation on members of a consortium to use in the relevant market or markets vessels allocated to the consortium and to refrain from chartering space on vessels belonging to third parties;

v. an obligation on members of a consortium not to assign or charter space to other vessel-operating carriers in the relevant market or markets except with the prior consent of the other members of the consortium.

47 Consortia Regulation (2009) op. cit §

36 In addition to the conditions above, the Regulation imposes in Article 4 core restrictions stipulating that the exemption provided for in Article 3 shall not apply to a consortium which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, has as its object:

i. the fixing of prices when selling liner shipping services to third parties (distinguishing thus the concept of conferences from that of consortia);

ii. the limitation of capacity or sales except for the capacity adjustments referred to in Article 3 (see above (i)(b));

the allocation of markets or customers.

Consortia Regulation 906/2009⁴⁸ clearly provides that a consortium must observe certain obligations and conditions. In fact the conditions set by EU Competition law are summarised as follows: (i) proportionate measures in scope and in duration, (ii) legitimate benefits, and (iii) beneficial effect on competition. In particular:

i) The existence of effective competition in terms of price and services provided;

48 For legislative analysis see: Pozdnakova Alla, "New liner consortia block exemption: a legislative commentary", European Competition Law Review, [2010] pp.

415-420, in particular pp. 419-410. I Quote: “The block exemption no longer contains a list of obligations to be fulfilled by the consortia. The Commission first proposed retaining the obligation for a consortium to consult transport users in the draft exemption, but decided to drop it, probably because market information revealed that in practice such consultations do not take place. Instead, consultations concerning the commercial terms of the service take place on an individual basis and, moreover, as some transport users pointed out, shippers' councils rarely have the resources and information to engage in discussions with the consortium as a whole. Article 8 of the draft Regulation that imposed on a consortium an obligation to demonstrate, at the request of the Commission or the national competition authority of a Member State, compliance with the conditions and obligations attached to the block exemption has also been omitted.

Lastly, the Regulation does not any longer expressly provide for a right of the Commission or national competition authorities to withdraw the block exemption in individual cases of non-compliance with the criteria of art.81(3). In principle, a provision to this end in the consortia block-exemption regulation is abundant, as the right to withdraw block exemption where co-operation turns out to be incompatible with art.81(3) is already envisaged elsewhere.”

37 ii) A market share of under thirty per cent (30%) – in each market – calculated by reference to the volume of goods carried when it operates within a conference, or under thirty five per cent (35%) when it operates outside a consortium;

iii) To allow their members a degree of independence, such as the right to offer their own arrangements and services, to withdraw from the consortium without financial penalty and to engage in independent marketing;

iv) They must not cause detriment to Community ports, users or carriers;

v) To demonstrate to the Commission that they consult their users on important matters and that the conditions of their maritime transport services are made available to users at reasonable cost.