Anti-trust deal on horizon for shipping lines

Date: 12/11/1998

Bruce Barnard
THE European Commission is within sight of a peace deal to end a bitter anti-trust battle which culminated last month in record fines being imposed on the world's top container shipping lines.

The compromise is emerging as Brussels-based lawyers for the 15 European, American and Asian members of the Transatlantic Conference Agreement (TACA) prepare a legal challenge to the 273-million-ecu penalties.

Both sides have been exhausted by the decade-long dispute, which has sometimes degenerated into personal attacks, with one prominent maritime lawyer likening Competition Commissioner Karel van Miert to a "rebellious teenager".

Several EU governments also tried to influence his officials' investigation to help their shipping firms.

The Commission's understaffed Directorate-General for competition (DGIV) has spent an enormous amount of time simultaneously probing opaque shipping practices and trying to set anti-trust ground rules.

The shipping lines themselves face an additional hefty fine if the issue is not settled quickly.

The TACA carriers were fined for violating EU competition rules by jointly fixing inland freight rates for transporting containers from, for example, Detroit to Düsseldorf. The Commission rejected claims that an anti-trust exemption granted by Union governments in 1987 for rate-setting shipping conferences covered both the sea and land legs of a voyage.

The Commission's ruling was a victory for the European Shippers' Council, which claimed that high freight rates harmed price-sensitive EU exports to the US. But the lines can take solace from the fact that the financial benefits of TACA's arrangements probably outweighed the fines on individual carriers.

Now the carriers say they are willing to abandon joint inland pricing in Europe if they can get anti-trust immunity for port-to-port contracts for several lines.

They also want TACA members to be allowed to offer confidential individual service contracts to shippers.

Jean-François Pons, deputy director-general of DGIV, told a recent meeting of European shippers in Barcelona that this was broadly acceptable to the Commission.

The compromise, however, would leave shipping lines operating under conflicting regimes on either side of the Atlantic, as they would only be able to quote joint rates to and from a European port while being allowed to quote collectively for the inland leg in the US.

Pons met officials from the US Federal Maritime Commission recently to ensure that Brussels and Washington were writing broadly similar anti-trust rules.