This Decision is addressed to the undertakings listed in Annex I.
This Decision shall be enforceable pursuant to Article 192 of the EC Treaty.
Done at Brussels, 16 September 1998.
For the Commission
Karel VAN MIERT
Member of the Commission
(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 175, 23.7.1968, p. 1.
(3) OJ L 378, 31.12.1986, p. 4.
(4) OJ 127, 20.8.1963, p. 2268/63.
(5) OJ L 209, 21.8.1969, p. 11.
(6) OJ L 376, 31.12.1988, p. 1.
(7) OJ L 376, 31.12.1994, p. 1.
(8) C(96) 3414 final.
(9) The Statement of Objections was based on Article 3 of Regulation No 17, Article 10 of Regulation (EEC) No 1017/68 and Article 10 of Regulation (EEC) No 4056/86.
(10) I.e. charge a rate different from the tariff rate. Under American law, the right of members of an exempted conference to take independent action is mandatory with regard to tariff rates: this means that any member of a conference has the right to depart from the conference tariff in respect of a particular class of goods, providing that notice is given to the other members of the conference.
(11) The equivalent of independent action.
(12) The Gulfway and Eurocorde Discussion Agreements were agreements dating from 1985 whereby the members of the conferences operating between the United States and Northern Europe discussed prices and transport conditions with the non-conference liner shipping companies operating on those trades.
(13) See footnote 10.
(14) I.e. charge a rate different from the service contract rate.
(15) Following receipt of the preliminary observations of the Commission (see recital (6)), the TACA parties had written to the Commission on 24 January 1995 informing it that the TACA parties proposed to amend the TACA to limit the scope of the TACA to ad hoc slot and space chartering arrangements.
(16) Connective carrier arrangements concern the inclusion in vessel sharing agreements (VSAs) of provisions such as the following, "A party may utilise space made available to it hereunder to provide space to a non-party ocean common carrier (pursuant to another agreement). [...] A party may make a available to another party hereunder space provided by a non-party ocean common carrier (pursuant to another agreement), [...]". An example of how this works in practice is as follows. Carriers A, B and C are parties to TACA. Carriers A and B participate in different VSAs. Under the "connective space chartering authority", carrier A may make space available to carrier C (space that is provided to carrier A on a carrier B vessel) without carrier C needing to be a party to the VSA between carriers A and B.
(17) See letter of Mr V. L Bijvoets, Chairman of the IMC and Chief Executive Officer of Nedlloyd, to the Commission dated 28 July 1995.
(18) See letter of Lovell White Durrant, the legal advisers to the TACA parties, to the Commission dated 3 October 1995.
(19) According to "Contracts between shippers and shipping conferences", a study carried out on behalf of EC Directorate-General for Transport by Brinkman-ship Ltd in February 1996, "Only 17 two-year contracts were signed".
(20) 29 August 1995 - France; 12 September 1995 - Germany; 26 September 1995 - United Kingdom, Ireland; 10 October 1995 - Austria, Italy, Denmark, Sweden, Finland.
(21) Paragraph 3.17 of the reply to the supplementary Statement of Objections.
(22) Footnote 3 to Annex VIII of the reply to the supplementary Statement of Objections.
(23) In any event, it may be noted that the figure of 3600 exchanges over a period of seven months amounts to one container exchanged per carrier per day.
(24) Application for exemption, paragraph 4(10).
(25) [1996] ECR I-5951, paragraphs 13, 14 and 15.
(26) Goods are transported on container vessels in sealed boxes, the most common types of which are 20-foot equivalent units (teus) and 40-foot equivalent units (feus).
(27) See The Journal of Commerce, Shipping Review & Outlook, 6 January 1997 at page 73C. Transit times on the North Atlantic are typically two to three weeks for a scheduled liner service.
(28) Drewry, Global Container Markets, London 1996, pp. 38 to 48.
(29) Such one-way substitutability is not restricted to shipping: for example, although soft drinks are not a substitute for bottled waters, it is not necessarily the case that bottled waters are not a substitute for soft drinks, see Commission Decision 92/553/EEC (IV/M.190 - Nestlé/Perrier) (OJ L 356, 5.12.1992, p. l.)
(30) According to Mats Jansson, President of Unicool and Cool Carriers, "The reefer container capacity deployed is still limited and the negative impact so far on the demand for specialised reefers is small." (Fairplay, 3 July 1997).
(31) Drewry, Global container markets, p. 76.
(32) This market is described in greater detail at recitals (25) to (70) of the TAA Decision: the TAA Decision is referred to by the TACA parties at recital (1)(4) of the application for exemption of the EIEIA.
(33) Drewry, "Global container markets", p. 88.
(34) In the US trades, conferences may be joined without the consent of the existing members and are accoringly termed "open" conferences.
(35) Letter from TAA to the European Shippers' Councils dated 13 October 1992.
(36) OJ L 378, 31.12.1994, p. 17.
(37) See Unctad, The liner conference system. TD/B/C4/62 1970, paragraph 10. The distinction between common carriage and contract carriage predates liner shipping conferences. An example of the distinction may be found in the UK Carriers Act 1830 (11° Geo. IV. & 1° Gul. IV), an Act of Parliament limiting the liability of common carriers, which provides that, "Provided always, and be it further enacted, That nothing in this Act contained shall extend or be construed to annual or in anywise affect any special contract between such mail contractor, stage-coach proprietor, or common carrier, and any other parties, for the conveyance of goods and merchandises".
(38) Section 3(14) of the American Shipping Act 1984 defines a "loyalty contract" as "[...] a contract with an ocean common carrier or conference, other than a service contract or contract based on time-volume rates, by which a shipper obtains lower rates by committing all or a fixed portion of its cargo to that carrier or conference".
(39) The essential terms of a service contract include: (a) the origin and destination port ranges or geographic areas; (b) the commodity or commodities involved; (c) the minimum volume; (d) the line-haul rate; (e) the duration; (f) the service commitments; and (g) the liquidated damages for non-performance, if any.
(40) United Nations Conference of Plenipotentiaries on a Code of Conduct for Liner Conferences, Final Act and Annexes, UN, Geneva, Doc TD/Code/11/Rev. 1, 9 May 1974. The third recital of Regulation (EEC) No 4056/86 provides as follows: "[...] whereas the Regulation applying the rules of competition to maritime transport foreseen in the last recital of Regulation (EEC) 954/79 should take account of the adoption of the Code; whereas as far as conferences subject to the Code of Conduct are concerned, the Regulation should supplement the Code or make it more precise".
(41) OJ L 121, 17.5.1979, p. 1.
(42) A rate published in a tariff which is conditional on receipt of a specified aggregate volume of cargo or aggregate freight revenue over a specified period of time.
(43) According to a presentation made by TACA to selected shippers on 6 July 1995, in the first quarter of 1995 some 59,5 % of all TACA carryings moved pursuant to service contracts and 40,5 % at tariff rates. According to "Contracts between shippers and shipping conferences", a study carried out on behalf of the Commission Directorate-General for Transport by Brinkman-ship Ltd in February 1996, "TACA has signed some 450 contracts (westbound) for 1996, representing close to 65 % of the annual carryings of the conference ".
(44) I.e. parcels consolidated by freight forwarders into shipments of 20 or 40-foot loads.
(45) According to Albert A. Pierce Jr., Executive Director of the Transpacific Westbound Rate Agreement (as reported in American Shipper in December 1994), in October 1994 the TWRA was in the course of negotiating its third-ever service contract and had offered a 2 % discount from tariff rates for a minimum-volume commitment of 5000 feu. The October 1995 edition of American Shipper reported that this one-year contract took some eight months to negotiate and the minimum volume eventually agreed is 9100 feu for which space is guaranteed. The February 1996 edition of American Shipper reported that in the first week of 1996 a further 20 contracts had been signed. It is understood that the number of such service contracts has further increased in 1997.
(46) The prohibition of individual service contracts by the Transpacific Westbound Rate Agreement (TWRA) and the Asia-North America Eastbound Rate Agreement (ANERA) with effect from 1 July 1986 resulted in the immediate departure of Evergreen from both agreements. See "Service contracts: a case study of unfulfilled promises", N. Shashikumar, Marit. Pol. Mgmt, 1986, Vol. 16, No 1, 13-26.
(47) See "The Effectiveness of collusion under antitrust immunity - The case of liner shipping conferences", Paul S. Clyde and James D. Reitzes, Bureau of Economics Staff Report, Federal Trade Commission, December 1995, "unlike independent action on regular tariff rates where the 'discount' must be offered to all shippers of that commodity on that route, [service] contracts could be written in a manner which effectively allowed the conference carrier to offer a 'selective' discount to that shipper (or a small group of 'similarly-situated' shippers). Due to these circumstances, permitting independent action on service contracts could have increased the attractiveness of cheating and inhibited the ability of the conference to detect and punish cheating".
(48) Under service contracts, the discounts from tariff class rates are generally determined by reference to bands of minimum quantity commitments, for example 500 to 749 teu may attract a discount of, say, USD 40 per teu.
(49) See LWD letter to the Commission dated 17 November 1995.
(50) Cho Yang, MSC, DSR/Senator, POL, OOCL.
(51) Cho Yang, DSR/Senator, Hanjin, Hyundai, POL, Tecomar/TMM.
(52) See for example SC92-017.
(53) Cho Yang, DSR/Senator, MSC, Hanjin, POL, Tecomar and TMM.
(54) See the TAA Decision recitals (135) and (136).
(55) See (second) Lovell White Durrant letter to the Commission dated 3 May 1995: "In relation to full container load (FCL) cargo, however, some TACA parties have elected, as part of their overall corporate business policy, planning, marketing and investment strategy, not to maintain large sales forces and/or extensive agency networks to solicit cargo from the numerically great number of small and medium-sized proprietary shippers of FCL cargo. As a consequence, such carriers tend to utilise and depend to a greater extent on the broad NVOCC industry to solicit and aggregate significant volumes of FCL cargo. In distinction to such TACA parties, others have elected to maintain and bear the fixed costs of extensive internal sales forces, customer service functions and agency networks. These carriers tend to deal to a much greater extent directly with FCL proprietary shippers and therefore tend to view NVOCCs as competitive and rival carriers (since they too are competing for proprietary shipper FCL cargo)".
(56) See (second) letter of Lovell White Durrant to the Commission dated 3 May 1995.
(57) See reply to the Statement of Objections, paragraph 44.
(58) See application for exemption paragraph 2(5).
(59) See reply to the statement of objections, paragraph 332.
(60) See reply to the statement of objections, paragraph 49.
(61) See reply to the statement of objections, paragraph 305.
(62) Section 18 Report on the Shipping Act of 1984, Federal Maritime Commission, September 1989, p. 544.
(63) The effect of this is that the TACA parties excluded relevant agreements affecting conditions on the Europe/Canadian trades and the Mediterranean/American trades.
(64) A detailed description of the VSA and related agreements was published in OJ C 185, 18.6.1997, p. 4. In the context of the application for individual exemption of the VSA, the VSA parties have undertaken to the Commission not to exercise in the geographic area covered by the EC Treaty the provisions relating to inland and maritime rate-making, discussion and agreement on the terms relating to freight forwarder compensation and discussion and agreement on common essential terms in service contracts.
(65) The owner of a liner vessel is usually readily identifiable from the name of the vessel because of the practice of adopting names including the name of the owner or other means of identifying the owner: e.g. Atlantic Conveyor (ACL), Neptune Jade (NOL), MSC Pamela (MSC), etc.
(66) Affidavit of Karen V. Gregory, Fact finding investigation No 21 - Activities of the transatlantic agreement and its members, dated 20 October 1994.
(67) See reply to the statement of objections, paragraph 223.
(68) See reply to the statement of objections, paragraph 131.
(69) For example on 29 December 1994, Hanjin wrote to the TACA secretariat in the following terms: "This [IA] is being taken until S/C is concluded".
(70) See Unctad interim report on restrictive business practices, New York 1971 and "Excluding capacity constrained entrants through exclusive dealing: theory and an application to ocean shipping", Jong-Say Yong, The journal of industrial economics, June 1996.
(71) See reply to the statemant of objections, paragraph 155.
(72) Drewry, Global container markets, page 85.
(73) Source: Lloyds Shipping Economist.
(74) On 1 December 1995, Evergreen announced price increases for its transatlantic eastbound to Europe trades of USD 110 per teu and USD 140 per feu to take effect from 1 January 1996. Compare this with the TACA 1996 business plan at Annex III.
(75) See reply to the statement of objections, paragraph 31.
(76) The reason for which figures for Puerto Rico are included with those of the USA east coast may be related to the fact that Puerto Rico is included with the Seventh District Circuit of the United States Federal Court along with Massachusetts.
(77) The Commission did not argue in the administrative proceedings leading to the adoption of this Decision that Puerto Rico does not form part of the relevant geographic market in this case since it was not until the stage of the reply to the statement of objections that the TACA parties appeared to put forward this claim. In the present case, this question does not seem to raise any significant issues although it is possible that in another case dealing with, for example liner shipping services in the Caribbean, it would be necessary to examine in detail whether or not Puerto Rico falls within the same geographic market as the Continental USA States.
(78) See Economic analysis of China Ocean Shipping Co. 1994-1997, Bureau of Economics and Agreement Analysis, Federal Maritime Commission, June 1997.
(79) See Commission press release IP/96/400 of 8 May 1996 announcing the Commissions decision not to oppose exemption of the St Lawrence coordinated service (SLCS), a consortium agreement relating to a joint service operated by CanMar and OOCL between Montreal and ports in northern Europe.
(80) Members: ACL, Canada Maritime/Cast, Hapag Lloyd, OOCL and POL. These tariffs do not include Canadian Gateway cargo. The following price increases were announced with effect from 1 January 1996, "All freight rates in [their] tariffs will be increased by USD 110 per teu and USD 160 per feu container in respect of general cargo, and the tariff premium for specialised equipment (open top and flat rack containers) will be increased to USD 400 per teu and USD 500 per feu".
(81) Commission notice on the internal rules of procedure for processing requests for access to the file in case pursuant to Articles 85 and 86 of the EC Treaty, Articles 65 and 66 of the ECSC Treaty and Council Regulation (EEC) No 4064/89 (OJ C 23, 23.1.1997, p. 3).
(82) Drewry, Global container markets, p. 87.
(83) TMM and Tecomar had been present on the transatlantic trade but had not been conference members and, in any event, their carryings of full containers in, for example, the second quarter of 1995 represent less than 1 % and 2 % respectively of all TACA carryings.
(84) See footnote 7. Commission Decision 94/980/EC on the transatlantic agreement of 19 October 1994, OJ L 376, 21.12.1994, p. 1, recitals (341) to (343).
"(341) The real purpose of the introduction of differentiated rates in a case such as that of the TAA is to bring independents inside the agreement: if they were not allowed to quote prices lower than those of the old conference members, these independents would continue as outsiders competing against the conference, especially in terms of price. The advantage to the old conference members is that this limits the activities of outsiders and thus the competition they offer. Such a system substantially reduces effective competition from outsiders, whose existence is the main safeguard for the block exemption given to liner conferences.
(342) This objective reveals the true nature of the TAA; it emerges clearly from various points already made here. Reference should be had to recital 117 et seq., which describes the recent history of the trade, the document summarising the conclusions of a meeting of all members of the TAA held in Geneva on 13 January 1992 (see footnote 70); and the speech by the President of Senator Lines, a member of the TAA, delivered shortly before the agreement entered into force.
(343) This type of agreement seeks to disguise as a conference what is really an agreement with outsiders, independents wishing to maintain price flexibility. This is not a genuine liner conference, but an agreement between a conference (i.e. the rate and contract committee members or 'structured members') and outsiders (i.e. the 'unstructured members': see recitals 133, to 144). Such agreements do not benefit from the block exemption granted to conventional conferences."
(85) FMC Agreement 203-011468. APL/MOL/OOCL Asia-Pacific Alliance Agreement ("A-Pac").
(86) Drewry, Global container markets, p. 69.
(87) Drewry, Global container markets, p. 71.
(88) Drewry, Global container markets, p. 70.
(89) Drewry, Gobal container markets, p. 8.
(90) See 1981 Commission memorandum (COM(81) 423 final: Proposal for a Council Regulation (EEC) laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport (OJ C 282, 5.11.1981, p. 4).
(91) No examples have ever been put forward by the TACA parties (or any other shipping line) of shortages of capacity arising from the withdrawal of vessels from a trade.
(92) See for example the judgement of the Court of First Instance in Case T-29/92 SPO v. Commission [1995] ECR II-289, point 294, where the Court of First Instance considered that no distinction could be made between normal and destructive competition. Appeal rejected as manifestly inadmissible by Order of the Court of 25 March 1996 (Case C-137/95 P, [1996] ECR I-1611).
(93) Dr Pirrong, "Core theory and liner shipping markets" (Journal of law and economics 1992, footnote on p. 11).
(94) "Competition, contestability and the liner shipping industry", p. 310.
(95) See for example, Jankowski in "The development of liner shipping conferences", International Journal of Transport Economics 1989; Jansson and Schneerson in their book Liner shipping economics, 1987; the analysis of the Federal Trade Commission, "An analysis of the maritimeindustry and the effects of the 1984 Shipping Act", November 1989; the analysis of the American Department of Justice, "Analysis of the impact of the Shipping Act of 1984", March 1990; the lecture given by Professor S. Gilman at Tarporley in February 1994.
(96) See for example Jansson and Scheerson, Chapter 10.2 "Common costs and indivisibility".
(97) See the Article "Sea-Land's computer wars" in Containerisation international, August 1995 and the article "Market share isn't everything" in American Shipper, July 1995; see also the Drewry report 1991, pp. 104 to 106. For example, the article in American Shipper states in relation to Atlantic Container Line: "the company developed a contribution model which works off equipment flows. The model serves as a chargo-acceptance guideline. As a result sales staff are much more aware these days of the overall value of a business prospect". See also the "liner industry: structural changes and future outlook" Industrial Bank of Japan Quarterly Survey (1995, IV), There has been a fundamental shift from the profit-management system by ship or route to management by cargo unit. The profit for each cargo unit yields the net contribution of each container per voyage. The introduction of unit management has resulted in one container having the same meaning that one ship had in the past (p. 43).
(98) Pp. 105 and 106.
(99) See in particular Gilman, Tarporley 1994.
(100) See footnote 93.
(101) See for example Jankowski, "Notes and Comments: Competition, Contestability and the Liner Shipping Industry", Journal of transport economics and policy, May 1989, or from the same author "The Development of Liner Shipping Conferences", International journal of transport economics, October 1989, and Professor S. Gilman, Tarporley, February 1994.
(102) See, inter alia, Federal Trade Commission Report, November 1989, p. 20; Jansson and Schneerson, Chapter 10.2; and the article Sea-Land's Computer War's, Containerisation international, August 1995.
(103) See footnote 94.
(104) Revenue pooling and cartel, p. 173. See also The economics of ocean freight rates, Bennathan& Walters, 1969, Praeger.
(105) Sherer and Ross, Industrial market structure and economic perfomance, 1990, Houghton Mifflin, p. 674.
(106) See also Jansson and Schneerson in Liner shipping economics, Chapter 10.2 and Annex A.
(107) See also Europe's great divide, American shipper, December 1995.
(108) In accordance with Article 56 of the EEA Agreement, the Commission is the competent body in this case.
(109) Judgment of the Court of Justice in Joined Cases 56 and 58/64 Consten and Grundig v. Commission [1966] ECR 299, at p. 342. Commission Decision 84/405/EEC (IV/30.350, Zinc Producer Group) OJ L 220, 17.8.1984, p. 27 recital (71): "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."
(110) A number of the TACA parties (Sea-Land, Maersk and P& O Nedlloyd) have recently left the Southern Europe America Conference and formed the United States Southern Europe Conference.
(111) See judgement in Consten and Grundig; footnote 109, p. 341.
(112) See footnote 92; [1995] ECR II-289, paragraph 235.
(113) Judgment of the Court of First Instance of 8 October 1996 in Joined Cases T-24/93, T-25/93 and T-28/93, CEWAL, Compagnie maritime belge transports SA and Others v. Commission [1996] ECR II-1201, paragraph 205.
(114) See six recital of Regulation (EEC) No 4056/86 describing the effects which restrictive practices concerning international maritime transport may have on Community ports. See footnote 113 CEWAL, paragraph 202.
(115) Case 136/86, BNIC v. Aubert, Judgment of 3 December 1987, [1987] ECR 4789, paragraph 18. Similarly, the Court ruled under Article 92 of the EC Treaty 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 219, paragraphs 57, 58 and 59, that subsidisation 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.
(116) See Judgments of the Court of Justice of 24 October 1995 in Case C-70/93, BMW v. ALD [1995] ECR I-3439, at paragraph 28, and of Case C-266/93, Bundeskartellamt v. Volkswagen and VAG, [1995] ECR I-3477, at paragraph 33 "having regard to the general principle prohibiting anticompetitive agreements laid down in Article 85(1) of the Treaty, provisions in a block exemption which derogate from that principle cannot be interpreted widely and cannot be construed in such a way as to extend the effects of the regulation beyond what is necessary to protect the interests which they are intended to safeguard."
(117) See CEWAL, cited in footnote 113, paragraph 50.
(118) SEC(94) 933 final, adopted by the Commission on 8 June 1994.
(119) OJ L 378, 31.12.1986, p. 1.
(120) Judgment of the Court of Justice in Case C-96/94, Centro Servizi Spediporto v. Spedizoni Marittima del Golfo [1995] ECR I-2883, paragraph 92.
(121) The Court of Justice did not accept the argument, made by the United Kingdom as intervener, that the effectiveness of Regulation (EEC) No 4055/86 would be undermined if, given the prevalence of multimodalism in international trade, the Regulation were held not to apply at all to multimodal transport services.
(122) See the European Parliament's 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 C 255, 3.10.1986, p. 176.
(123) See reply to the statement of objections, paragraph (11).
(124) For a general discussion of this question see paragraphs 61 to 67 of the "Interim report of the multimodal group", presented to Commissioner van Miert on 6 February 1996 by a group of independent experts set up to consider certain aspects of collective inland price-fixing by liner shipping companies.
(125) It should be noted that, as indicated above, the hub and spoke system does not cover rail movements between the Benelux ports and the Frankfurt/Mainz hub.
(126) This view is consistent with the view expressed in the Final Report of the multimodal group submitted to Commissioner Van Miert on 18 November 1997.
(127) "As a general guideline, any element of a supplier's offer that has an economic value in the eyes of the customer is likely to influence his choice between competing offers and therefore enable one supplier, through modifying his terms, to gain a competitive advantage." Butterworths Competition Law II [849].
(128) Judgment of the Court of First Instance in Joined Cases T-213/95 and T-18/96, SCK & FNK v. Commission, [1997] ECR II-1739, paragraph 164.
(129) Letter from Ms Nancy E. McFadden, General Counsel, US Department of Transportation, to Senator John McCain, Chairman of the US Senate Committee on Commerce, Science and Transportation dated 8 October 1997.
(130) This Decision does not deal with the possible application of Article 86 to such arrangements where they have a significant foreclosing effect.
(131) See the TAA Decision, paragraphs (322) and (323).
(132) See reply to the statement of objections, paragraph (293).
(133) Daniel Marx Junior, International shipping cartels: a study of industrial self-regulation by shipping conferences (Princeton University Press).
(134) OJ L 89, 21.4.1995, p. 7.
(135) Article 9 of Commission Regulation (EC) No 870/95 (the Consortia Group Exemption) demonstrates the Commission's positive attitude to service arrangements - but does not accept that price-fixing is necessary to obtain their advantages.
(136) See also Contracts between Shippers and Shipping Conferences, Brinkman-ship Ltd, February 1996, p. 25.
(137) See Contracts between Shippers and Shipping Conferences, Brinkman-ship Ltd, February 1996, p. 26.
(138) Sea-Land press release.
(139) See The Effectiveness of Collusion under Antitrust Immunity - the Case of Liner Shipping Conferences, Paul S. Clyde and James D. Reitzes, Bureau of Economics Staff Report, Federal Trade Commission, December 1995 - "we do find that the level of freight rates is significantly lower on routes where conference members are free to negotiate service contracts with shippers".
(140) This is particularly important for "advanced" shippers: high volumes (1 000 teu or more per annum), global coverage (three main trades plus others) and needing value-added services (warehousing, labelling, etc).
(141) The US Advisory commission on Conferences in Ocean Shipping.
(142) See (first) letter of Lovell White Durrant to the Commission dated 3 May 1995.
(143) See (first) letter of LWD to the Commission dated 3 May 1995: "This provision relating to liquidated damages reflects the requirement of the US legal framework that minimum cargo/value commitments should be meaningful (see the Regulation of the FMC at 46 § 514.17 (d)(7)(vii), which states that 'Mandatory Term No 7 shall include liquidated damages for non-performance')."
(144) See Section 3(21) of the US Shipping Act 1984 "... the contract may also specify provisions in the event of nonperformance on the part of either party" and Section 8(c) "The essential terms shall include... the liquidated damages for nonperformance, if any" (emphasis added).
(145) Judgment of the Court of Justice in Case C-393-92, Gemeente Almelo and Others v. Energiebedriif IJsselmij NV, [1994] ECR I-1477, paragraphs 42 and 43. See also the opinion of Advocate-General Darmon at paragraph 117.
(146) Judgment of the Court of First Instance in Joined Cases T-68/89, T-77/89 and T-78/89 SIV and Others v. Commission (Flat Glass) [1992] ECR II-1403, paragraphs 357 to 359.
(147) See footnote 113, recital (64)
(148) See footnote 146, recital (343).
(149) See footnote 113, recital (65).
(150) Judgment of the Court of Justice Joined Cases 6 and 7/73 Commercial Solvents v. Commission [1974] ECR 223, p 266: "The consumer, after all, is interested only in the end product, and it is detriment to the consumer, whether direct or indirect, with which Article 86 is concerned[...]" Advocate-General Warner.
(151) Judgment of the Court of Justice in Case 85/76 Hoffman-La-Roche v. Commission [1979] ECR 461, paragraphs 38 and 39. See also its judgment in Cases 78/70, Deutsche Grammophon v. Metro [1971] ECR 487, paragraph 17: "the ability to prevent effective competition on an important part of the relevant market taking into account the existence of any other producers selling similar products and their position on the market", and 322/81 NV Nederlandsche Banden-industrie Michelin v. Commission [1983] ECR 3461, paragraph 48: "it is not a precondition for a finding that a dominant position exists in the case of a given product that there should be a complete absence of competition from other partially interchangeable products so long as such there should be a complete absence of competition from other partially interchangeable products so long as such competition does not affect the undertaking's ability to influence appreciably the conditions in which that competition may be exerted or at any rate to conduct itself to a large extent without having to take account of that competition and without suffering any adverse effects as a result of its attitude."
(152) Judgment of the Court of Justice in Case C 62/86 Akzo Chemie BV [1991] ECR I-3359, paragraph 60, where the Court held that "very large (market) shares are in themselves, save in exceptional circumstances evidence of the existence of a dominant position[...] That is the situation where there is a market share of 50 % such as that found in this case".
(153) See footnote 113, paragraph (77).
(154) Compare this with the inland tariff, where rates are not quoted by commodity and do not vary according to the value of the contents of the container, although variations may be encountered depending on whether the container is a teu or an feu. The Commission recognised in the TAA decision that the TAA parties had not eliminated competition so far as the inland transport of containers was concerned.
(155) Price discrimination is recognised as one of the most frequently cited direct measurements of market power; especially where the absence of cost differences is readily discernible. See eg B. Hawk, US, common market and international antitrust (1990), p. 790. See also F M Scherer and David Ross, Industrial market structure and economic performance, Chapter 13 (Houghton Mifflin, 1990).
(156) This Decision does not address the question whether the TACA parties' agreement relating to CAF meets the conditions of Article 4 of Regulation (EEC) No 4056/86.
(157) United Brands [1978] ECR 207.
(158) Source: Lloyd's shipping economist.
(159) See paragraph (538) and footnote 157, United Brands: paragraphs 125 to 128.
(160) Commission Decision 88/501/EEC (IV/31.043 Tetra Pak I) OJ L 272, 4.10.1988, p. 27, pp. 41, 42 and 43: affirmed by the Court of First Instance on 10 July 1990, in Case T-51/89 Tetra Pak v. Commission [1990] ECR II-309, recitals 25, 29 and 30.
(161) Judgment of the Court of Justice in Case 6-72, Europemballage Corporation and Continental Can Company Inc. v. Commission [1973] ECR 215. See also its judgment in Case 66/86 Ahmed Saeed Flugreisen v. Zentrale [1989] ECR 803; comments of Advocate-General Lenz in his first Opinion.
(162) See CEWAL, cited in footnote 113, paragraph 106 and judgment in Tetra Pak I, cited in footnote 160, recital (114).
(163) See Continental Can, cited in footnote 161, recital (26) (emphasis added).
(164) See Nederlandsche Banden-industrie v. Commission, cited in footnote 151, paragraph (57).
(165) Judgment of the Court of Justice in Case C 41/90 Höfner and Elser v. Macrotorn [1991] ECR I-1979, paragraphs 32 and 33 and also the judgment of the Court of First Instance in Case T-65/89 BPB Industries and British Gypsum v. Commission [1993] ECR II-389.
(166) Judgment of the Court of Justice in Case 30/87 Bodson v. Pompes Funèbres [1988] ECR 2479, paragraph 24.
(167) See sixth recital of Regulation (EEC) No 4056/86, describing the effect which restrictive practices concerning international maritime transport may have on Community ports.
(168) Commission Decision 93/50/EEC (IV/32.745 - Astra) OJ 20, 28.1.1993, p. 23, paragraphs (32) and (33), concerning joint venture between BT and SES. Restrictions vis-à-vis third parties took the form of foreclosure of other (potential) uplink providers, and also the choice of consumers was limited since United Kingdom customers were obliged to accept the uplink service offered by BT if they were interested in broadcasting via Astra. Contracts with third parties were made at a time when the third parties did not have the choice of concluding separate contracts as two different services. The terms of these contracts were determined by BT and SES in the context of their joint venture agreement.
(169) See footnote 168, recital (33) of the Decision.
(170) See Commission Decision 93/252/EEC (IV/33.440 and IV/33.486 - Gillette) OJ L 116, 12.5.1993, p. 21, at paragraph 34. Gillette had acquired an equity interest in Eemland, the company that bought the EC and USA interests of the Wilkinson Sword business. Gillette bought the interests of this business in the rest of the world. The relevant agreements for the context were a non-Community sale agreement, an intellectual property agreement, and a supply agreement. As a result the decision adopted by the Commission called for the sale of the equity interest in Eemland owned by Gillette, as well as the re-assignment to Eemland of the Wilkinson Sword business.
(171) See footnote 168 (Astra), recital (33).
(172) As the Court of Justice held in Joined Cases 100 to 103/80 Musique Diffusion Française v. Commission [1983] ECR 1825, that percentage refers to the undertaking's total turnover. See also the judgment of the Court of First Instance of 12 December 1991 in Case T-30/89, Hilti v. Commission [1991] ECR II-1439, paragraph 131.
(173) See footnote 161 (Ahmed Saeed), recital (32).
(174) Commission Decision of 26 November 1996, C(95) 3414 final.
(175) See The effectiveness of collusion under antitrust immunity - the case of liner shipping conferences, Paul S. Clyde and James D. Reitzes, Bureau of Economics Staff Report, Federal Trade Commission, December 1995 - "we do find that the level of freight rates is significantly lower on routes where conference members are free to negotiate (individual) service contracts with shippers".
(176) The Journal of Commerce stated on 18 October 1996 that The Atlantic is the only major trade lane that has not endured a serious price war this year. "While prices on the Pacific and Europe-Asia trade lanes have dropped significantly over the last year, Atlantic freight rates have remained fairly stable".
(177) Drewry, Global Container Markets, London, 1996, p. 8.
(178) Commission Decision 94/210/EC (HOV SVZ/MCN), OJ L 104, 23.4.1994, p. 34, recital 259.
