Industry needs guidance from EC. (shipping industry)(includes related article on E.C. competition law)

Editor's Note: This article was prepared by Philip Ruttley, partner of the European law firm Watson, Farley and Williams. The views in this article are strictly personal.

Only a few large consortia and alliances can benefit from exemption under EC regulation 870/95. But considerable uncertainty still exists, and the EC has done little to provide guidance.

It is now 18 months since the European Commission's regulation on consortia, Regulation 870/95, came into force.

During that period, the liner industry has seen great changes, with the arrival of the so-called "strategic alliances" such as the Grand Alliance and the Global Alliance.

So far, the reaction of the European Commission to this fundamental restructuring of the industry has been muted, if not hesitant. This article will assess the impact of EC competition rules on this important type of organization in the maritime industry.

Problem Of Definition

Consortia are extremely varied, to the point of almost defying one to find a common definition to describe them.

The term "consortium," as it is understood by EC law, covers a very wide range of so-called "horizontal agreements" between maritime operators, including joint fleet deployment, common scheduling, revenue pools, joint terminal and equipment use agreements, slot and space exchanges, common price agreements and discussion agreements.

Limited Scope For Exemptions

Unfortunately, the "block exemption" provided for consortia in Regulation 870/ 95 (see "Basic rules of EC competition law," page 22) is very narrowly drawn. The block exemption does not cover any consortium …