EU efforts to ensure open competition in the container shipping industry increased last week with confirmation from the European Commission that it has begun antitrust proceedings against a number of unnamed global shipping companies.
The move is the last stage of an investigation begun in response to accusations from shippers and forwarders that shipping companies are colluding when publishing intended price increases via the media. The investigation itself is aimed at ascertaining whether there is what the EU terms a ‘concerted practice’ between these companies, with their announcements intended to communicate price hikes between them rather than a genuine warning to customers.
In a statement released on November 22, the EU Commission revealed that its investigation has been ongoing since as long ago as 2009, since when “these companies have been making regular public announcements of price increase intentions” either on their own websites and as press releases in the “specialised trade press”.
“These announcements are made several times a year and contain the amount of increase and the date of implementation, which is generally similar for all announcing companies,” the statement continued. “The announcements are usually made by the companies successively a few weeks before the announced implementation date.
“The Commission has concerns that this practice may allow the companies to signal future price intentions to each other and may harm competition and customers by raising prices on the market for container liner shipping transport services on routes to and from Europe.
“The Commission will now investigate whether this behaviour amounts to a concerted practice in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and of Article 53 of the European Economic Area (EEA) Agreement.”
It’s generally believed that proving any collusion or wrong-doing will be extremely difficult given that, in recent years, shipping rates have fallen to a level that is considered by many in the industry as unsustainably low. This strengthens the idea that announced increases are simply a legitimate effort by these companies to keep their own businesses afloat in the face of extreme competition.
The Commission has confirmed that there is no legal deadline for bringing an antitrust investigation to an end. The duration of an investigation depends on a number of factors, including the complexity of the case, the cooperation of the undertakings with the Commission, and the exercise of the rights of defence.
While the individual companies have not been named, Maersk Line has confirmed that it is amongst them, issuing a statement that they are confident they have operated within the scope of the EU’s antitrust rules. In 2011, the offices of 14 of the world’s largest shipping companies – including Maersk – were targeted by EU authorities in a series of dawn raids across the continent.
European law strictly defends its open market and competitiveness policies so as to protect its markets against the influence of cartels. Any activities that may suggest companies are colluding or fixing prices between each other are, therefore, carefully investigated, and it is this factor that has brought the container shipping companies under the Commission’s microscope.
Several other industries have been targeted by the Commission in recent years, with the most high-profile including its antitrust investigation of suspected pricing collusion between Apple and a number of European and US-based e-book publishers, also in 2011.
