94/985/EC: Commission Decision of 21 December 1994 relating to a proceeding pursuant to Article 85 of the EC Treaty (IV/33.218 - Far Eastern Freight Conference) (Only the German, English, Danish, French, Italian and Dutch texts are authentic) (Text with EEA relevance)

• Articles: 8

Article 1

The members of the Far Eastern Freight Conference listed in the Annex have infringed the provisions of Article 85 of the EC Treaty and Article 2 of Regulation (EEC) No 1017/68 by agreeing prices for inland transport services supplied within the territory of the European Community to shippers in combination with other services as part of a multimodal transport operation for the carriage of containerized cargo between northern Europe and the Far East.

Article 2

The conditions of Article 5 of Regulation (EEC) No 1017/68 are not fulfilled.

Article 3

The members of the Far Eastern Freight Conference listed in the Annex are hereby required to put an end to the infringement referred to in Article 1.

Article 4

The undertakings to whom this Decision is addressed are hereby required to refrain in future from any agreement or concerted practice having the same or a similar object or effect to the agreement referred to in Article 1.

Article 5

Fines as set out below are hereby imposed on the undertakings to whom this Decision is addressed in respect of the infringement of the provisions of Article 85 of the EC Treaty and Article 2 of Regulation (EEC) No 1017/68 referred to in Article 1.

Compagnie Générale Maritime ECU 10 000

Hapag-Lloyd Aktiengesellschaft ECU 10 000

Croatia Line ECU 10 000

Kawasaki Kisen Kaisha Limited ECU 10 000

Lloyd Triestino di Navigazione SpA ECU 10 000

AP Moeller-Maersk Line ECU 10 000

Malaysian International Shipping Corporation Berhad ECU 10 000

Mitsui OSK Lines Ltd ECU 10 000

Nedlloyd Lijnen BV ECU 10 000

Neptune Orient Lines Ltd ECU 10 000

Nippon Yusen Kabushiki Kaisha ECU 10 000

Orient Overseas Container Line ECU 10 000

P & O Containers Ltd ECU 10 000

Article 6

The fines imposed in Article 5 shall be paid, in ecus, within three months of the date of notification of this Decision, into bank account No 310-0933000-43 of the Commission of the European Communities, Banque Bruxelles Lambert, Agence Européenne, Rond-Point Schumann 5, B-1040 Brussels.

After expiry of that period, interest shall be automatically payable on the fine at the rate charged by the European Monetary Institute for transactions in ecus on the first working day of the month in which this Decision is adopted, plus 3,5 percentage points, namely 9,25 %.

Article 7

This Decision is addressed to the undertakings listed in the Annex.

This Decision shall be enforceable pursuant to Article 192 of the EC Treaty.

Done at Brussels, 21 December 1994.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) OJ No L 175, 23. 7. 1968, p. 1 (Special Edition 1968 I, p. 302).

(2) OJ No L 378, 31. 12. 1986, p. 4.

(3) OJ No L 209, 21. 8. 1969, p. 11.

(1) The Case for Conference Rate Making Authority in the Inland Sector, Report prepared for the FEFC by Professor S. Gilman and M. Graham, July 1990.

(1) Reply to the Statement of Objections, 31. 3. 1993, p. 104.

(1) Reply to the Statement of Objections, pp. 38 and 105.

(2) CGM, Hapag-Lloyd, K Line, Lloyd-Triestino, Maersk, MISC, Mitsui, NYK, OOCL, P& O.

(1) Far Eastern Freight Conference, Europe/Japan & Japan/Europe Freight Conferences, Hong Kong/Europe Freight Conference, Philippines/Europe Conference, Sabah, Brunei & Sarawak Freight Conference.

(2) The scope of these services is described in paragraph 6 of this Decision.

(3) ICI-Dyestuffs, Case 48/69, [1972] ECR, p. 619, paragraph 115.

(4) Grundig/Consten, Joined Cases 56 and 58/64, [1966] ECR p. 299, paragraph 342. Zinc Producer Group, Commission Decision 84/405/EEC (OJ No L 220, 17. 8. 1984, p. 27): 'In any case, for Article 85 (1) to be applicable, it is sufficient for there to have been the intention to restrict competition; it is not necessary for the intention to have been carried out, in full or only in part, that is to say, for the restriction of competition to have been put into effect.' (5) Grundig/Consten, cited above, p. 341.

(1) See sixth recital of Regulation (EEC) No 4056/86 describing the effect which restrictive practices concerning international maritime transport may have on Community ports.

(2) Case 136/86, BNIC v. Aubert, [1987] ECR, p. 4789, paragraph 18. Similarly, the Court ruled pursuant to Article 92 in Joined Cases 67, 68 and 70/85, Kwekerij Gebroeders Van der Kooy BV and Others v. Commission (Dutch Natural Gas Prices I), [1988] ECR, p. 219, at paragraph 59, that subsidization of the price of natural gas to Dutch glasshouse crop producers by 5,5 % affected trade between Member States because of the importance of energy costs (25 to 30 % of the selling price) and of the market share (65 %) and the exports (91 %) of the firm receiving the State aid.

(1) French Seamen's Case No 167/73, [1974] ECR, p. 359, paragraph 32; Nouvelles Frontières, Cases, No 209-213/84, [1986], ECR, p. 1425, paragraphs 42 to 45; Ahmed Saeed, Case No 66/86, [1989] ECR, p. 803, paragraphs 32 to 33.

(2) Tariff Structures in the Combined Transport of Goods, Commission Decision 93/174/EEC of 24 February 1993, OJ No L 73, 26. 3. 1993, p. 38, paragraph 19.

(3) Ahmed Saeed, see footnote 15, paragraph 12 in relation to Regulation (EEC) No 3975/87.

(4) Ahmed Saeed, see footnote 15, paragraph 25.

(1) HOV SVZ/MCN, Commission Decision 94/210/EC of 29 March 1994, OJ No L 104, 23. 4. 1994, p. 34, paragraph 91. The English language version of Article 3 of Regulation (EEC) No 1017/68 has omitted the word 'sole', which is included in the original language versions of Regulation (EEC) No 1017/68 as well as in Regulations (EEC) No 4056/86 (Article 2) and (EEC) No 3975/87 (Article 2).

(1) See Case T-9/92, Automobiles Peugeot SA, Judgment of 22 April 1993, not yet reported, paragraph 37. '. . .having regard to the general principle of the prohibition of agreements inhibiting competition contained in Article 85 (1) of the Treaty, derogating provisions in a regulation granting exemption by category could not be interpreted broadly. . .' See also the opinion of Advocate-General Van Gerven in Case C-234/89, Delimitis, [1991] ECR I, p. 955, point 5. '. . .when an agreement is not covered by the terms of the block exemption regulation, that block exemption, in itself a derogation from the prohibition pursuant to Article 85 (1), and therefore to be strictly interpreted, may on no account be extended.' (2) The English language version of Regulation (EEC) No 4056/86 incorrectly uses the word 'shippers' instead of the correct word 'carriers'. That this is an error is clear for at least two reasons:

(i) the recital does not make sense in the English language version; and

(ii) the other language versions of the Regulation are unequivocal in referring to 'carriers' (e.g. 'transporteurs maritimes', 'trasportatori marittimi', 'Seeverkehrsunternehmen').

(3) See amendments to the proposal for a Council Regulation laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport, OJ No C 255, 13. 10. 1986, p. 176, paragraph 177.

(1) 'The Commission states that multimodal sea/land transport operations are subject to the rules of competition adopted for land transport and to those laid down for sea transport. In practice, non-application of Article 85 (1) will be the rule as regards the organization and execution of successive or supplementary multimodal sea/land transport operations and the fixing or application of inclusive rates for such transport operations, since both Article 2 of this Regulation (Regulation (EEC) No 4056/86) and Article 3 of Regulation (EEC) No 1017/68 state that the prohibition laid down by Article 85 (1) of the Treaty shall not apply to such practices'. (Council Doc. No. 11584/86 MAR 84, Annex III, p. 5 (19. 12. 1986)).

(1) See for example the Report of the Commission to the Council dated 8 June 1994 concerning the application of the Community's competition rules to maritime transport where it is stated at paragraph 3.1 - 'The Commission is wholly in favour of the development of multimodal transport, a modern mode of transport that meets a specific demand from shippers, and wishes to contribute to its development.' Doc. SEC(94) 933 final.

(2) Tariff Structures, see footnote 16.

(3) '. . .which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit. . .' (1) Article 1 (3) (c) of Regulation (EEC) No 4056/86 refers to 'shippers, consignees and forwarders', among others, as transport users.

(1) '. . .whereas liner conferences have a stabilizing effect, assuring shippers of reliable services;. . .' 8th recital of Regulation (EEC) No 4056/86.

(2) Gilman and Graham Report, paragraph 4.30.

(1) Gilman and Graham Report, paragraph 4.16.

(2) That is to say, conference members have agreed between themselves to serve a limited number of ports in the interests of rationalization.

(3) 'Detecting and deterring cheating has been termed the central cartel problem, and, because solving it is often difficult, many economists argue that price-fixing cartels are inherently unstable.' F. M. Scherer and David Ross, Industrial Market Structure and Economic Performance (Houghton Mifflin, 1990, p. 245).

(4) See page 131 of the transcript of the oral hearing in this case.

(5) Service contracts are agreements between individual shippers and individual shipping lines, or groups of shipping lines, for the carriage of a minimum number of containers and provision of special services at an individually negotiated price.

(6) Such as those provided for in Article 5 (2) of Regulation (EEC) No 4056/86.

(1) Note should be made of the Commission's statement in its Report to the Council concerning maritime transport: it considered:

'that, in certain circumstances, specific cooperation agreements between groups of shipowners or between shipowners and individual carriers could promote sufficient technical or economic progress to be allowed, by individual exemption, to set uniform inland rates.'

The Commission also stated in that Report that, if appropriate, it would be prepared to consider granting individual exemptions which also allowed:

'a provision to be included in the agreement of the conference of which the group lines (benefiting from the individual exemption) are members stipulating that the inland rates of the tariffs. . .may be not less than cost, thus largely avoiding any risk of destabilizing the conferences through cross subsidization between the inland and maritime segments.' (1) See also the Report of the Commission to the Council concerning the application of the Community's competition rules to maritime transport.

(2) HOV SVZ/MCN, cited above, paragraph 259.

(3) See, for example, Case 26/76, Metro v. Commission II [1977] ECR, p. 1875: 'price competition is so important that it can never be eliminated'.

(4) Case C-279/87, Tippex v. Commission [1990] ECR I, p. 261.

Schedules & Appendices

ANNEX

Compagnie Générale Maritime

Quai Galliéni, 22

F-92158 Suresnes Cedex

Hapag-Lloyd Aktiengesellschaft

Postfach 102626

Ballindamm 25

D-20095 Hamburg

Croatia Line

8 Riva

5100 Rijeka

Republic of Croatia

Kawasaki Kisen Kaisha Ltd

Hibiya Central Building

2-9 Nishi-Shinbashi 1-Chome

Minato-Ku

Tokyo 105

Japan

Lloyd Triestino di Navigazionie SpA

Passaggio S Andrea 4

I-34123 Trieste

AP Moeller-Maersk Line

Esplanaden 50

DK-1098 Koebenhavn K

Malaysian International Shipping Corporation Berhad

2nd Floor Wisma MISC

2 Jalan Conlay

PO Box 10371

50712 Kuala Lumpur

Malaysia

Mitsui OSK Lines Ltd

1-1 Toranomon 2-Chome

Minato-Ku

Tokyo 107

Japan

Nedlloyd Lijnen BV

Boompjes 40

NL-3011 XB Rotterdam

Neptune Orient Lines Ltd

456 Alexandra Road

No 06-00 NOL Building

Singapore 0511

Republic of Singapore

Nippon Yusen Kabushiki Kaisha

3-2 Marunouchi 2-Chome

Chiyoda-Ku

Tokyo

Japan

Orient Overseas Container Line

30th-31st Floor Harbour Centre

25 Harbour Rod

Wan Chai

Hong Kong

P& O Containers Ltd

Beagle House

Braham Street

UK-London E1 8EP

Wilh. Wilhelmsen Limited A/S

Olav V's G5

PO Box 1359

N-0161 Oslo