4 Concluding remarks
Liner shipping companies face considerable challenges regarding how EU competition law governs horizontal information exchanges. Competing carriers have, and continue to, engage in various agreements which, in addition to the public announcements, create different platforms for sharing information. Multiple platforms for information exchanges increase the market’s transparency. Since the global liner shipping market is characterised by few competing carriers holding significant market shares, such increased transparency arguably increases both the options to engage in collusive outcome, and to monitor and maintain existing collusion.
The thesis has examined how various forms of information sharing between liner shipping companies potentially can be viewed as pursuing anti-competitive objects of Article 101 TFEU, and has demonstrated that both traditional agreements and sophisticated forms of concerted practices can restrict competition by object. Additionally, several legal uncertainties when applying Art. 101 have been uncovered, potentially increasing the risks of cooperating for competing carriers. EU Courts and legislators need to address these unclarities to secure legal predictability for carriers and competition authorities.
Firstly, the concept of a “concerted practice” requires that exchanges of information reduce or remove “strategic uncertainty” in the liner shipping market. Due to the presumption that carriers remaining active on the market and not distancing themselves from information disclosed will make use of the information, many exchanges, both public and private, may be deemed concerted practices. EU legislators should arguably provide guidance on the degree of reduced strategic uncertainty required to fulfil the condition. Particularly public announcements are challenging, illustrated in Container Shipping, since predictions of future market developments concerning capacities, geographic coverage and freight rates may be found in quarterly reports or press releases directed at one’s customers. These statements can, however, reduce the degree of strategic uncertainty of competing carriers, potentially being treated as concerted practices.
Secondly, the definition of the relevant market has arguably paramount importance when determining both whether the exchange constitutes a “concerted practice” and if so, whether that practice restricts competition “by object or effect.” Case law reveals several relevant characteristics of the exchange, such as its frequency, age, level of aggregation, and degree of commercial sensitivity. These characteristics will, however, have different impact on competition depending on the relevant market and the number of competitors on that market. Although one can determine the major liner shipping companies’ global market shares, these shares will vary according to the region or trade route in question. Clear guidelines when determining the relevant market will increase predictability for competing carriers, especially in the current situation where a few liner shipping alliances dominate the global market.
Thirdly, there is unclarity regarding the distinction between ‘object’ v ‘effect’ and the assessments required. Traditionally, the dichotomy has implied to first checking whether the cooperation in its nature poses obvious threats to competition, restricting competition “by object.” If not, enforcers must fully analyse the conduct and its context within the market conditions to uncover whether it restricts competition ‘by effect.’ Particularly two methodical approaches are highlighted in theory. Applying an orthodox approach follows a strict categorisation of certain types of cooperation as ‘object’-infringements and can increase predictability for both undertakings and competition authorities. However, much of the case law in information exchanges applies an analytical approach by pointing to some degree of contextual analysis already in the ‘by object’-assessment, blurring the lines between the alternatives. Still, this can be deemed necessary to correctly categorise the conduct. Sophisticated and complex information exchanges are, for instance, likely to evade a rigid categorisation of the orthodox approach, even if the exchange, after some analysis, is revealed to clearly pursue an anti-competitive object. It rests at the enforcers to strike a balance, but clarification is required to ensure harmonised and effective enforcement of the EU competition rules.
Finally, competing carriers should re-evaluate their cooperative engagement in relation to the competition rules. The discussion has uncovered potentially vast exchanges of information ancillary to agreements, such as the pooling of cargo or revenue, and other joint operations within consortia agreements. Without sufficient safeguards and isolation of the cooperative areas, excessive exchanges of information may give rise to collusive outcome on other competitive parameters. Similarly, extensive cooperation on several commercial aspects naturally increases the exchange of sensitive information, and that information can be particularly harmful to competition in transparent markets. Excessive sharing of information may remove uncertainty regarding competitors’ future modifications of conduct, restricting competition “by object.” The analysis conducted in Chapter 3 shows that cooperation, particularly within the liner shipping alliances, is at risk of being treated as ‘object’-infringements. Because of the structural framework facilitating extensive cooperation on several commercial aspects, the agreements and information exchanged between alliance members can effectively reduce or eliminate competition in certain markets. The European enforcers should therefore provide more guidance on how Art. 101 will be applied to liner shipping alliances.