The European Commission has instituted an investigation into possible cartel practices of various shipping companies involved in container liner shipping, i.e. the transport of containers by sea on regular routes and fixed schedules. To name a few examples: the scheduled container services between the Asian ports of Beijing, Shanghai and Singapore and the European ports of Rotterdam, Hamburg and Southampton.
The European Commission suspects that the shipping companies have matched prices since 2009 already, because they regularly announce price increases shortly after each other. The shipping companies do so via press releases, their websites and the specialist press. The announcements state both the proposed price increases and the time at which the price increases will commence, and are usually identical. The price increases are usually announced shortly after each other and a few weeks before the date of commencement. The European Commission fears that this allows the shipping companies to match price increases. That restricts competition and is harmful for all companies that commission the carriage of goods by sea.
Competition law prohibits competitors from engaging in coordinated market behaviour, such as price-fixing or market allocation agreements. The same applies to the exchange of sensitive competitive information, e.g. information on prices and customers. As a rule, a company is not prohibited from unilaterally making a public announcement, for instance in a newspaper. That may be otherwise if that announcement is followed by public announcements by competitors. Responses from competitors to a public announcement may be a means of coordinating market behaviour, also known as signalling.
An example of signalling is the recent decision of the Netherlands Authority for Consumers and Markets (''ACM'') regarding three Dutch mobile operators. The ACM has found that the public announcements by mobile telephone companies KPN, T-Mobile and Vodafone regarding future market behaviour may present competition risks. The case in question involved public statements made at conferences and in professional journals regarding proposed price increases or poorer commercial conditions for consumers, without any underlying final decision-making. KPN, T-Mobile and Vodafone promised the ACM that they would refrain from this type of announcement in future to avoid any risk of prohibited concerted practices. The decision demonstrates that signalling is the focus of attention also at the Dutch supervisory authority.
In the case of the scheduled container liner shipping, the European Commission will have to investigate whether the shipping companies have indeed developed a joint strategy to influence each other’s prices in this manner. If so, the shipping companies may be faced with fines of millions of euros imposed by the European Commission. The shipping companies can then also expect huge claims from shippers and other carriers.
This blog was also published on the website of Fenedex, the trade association of Dutch exporters and other internationally operating companies.
