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European Union competition law: the new regime relating to shipping – Regulation 1419/2006
Regulation 1419/2006 has established a new European Union (“EU”) competition regime for the shipping sector. 1 This is a dramatic change for the sector 2 because it had for many years benefited from the protective regime embodied in Regulation 4056/86 3 which exempted the sector from the full rigours of EU competition law enforcement by the European Commission. 4 The scope of Regulation 4056/86 meant that, in
terms of Commission enforcement, what are now, Articles 101 and 102 of the TFEU applied before October 2008 only to liner shipping; this meant that, for example, tramp shipping and cabotage were not subject to European Commission enforcement. 5 Regulation 4056/86 had enabled the Commission to apply what are now Articles 101 and 102 of the TFEU directly to maritime transport in certain but limited circumstances 6 but it also contained a controversial block exemption 7 for liner conferences. Since 18 October 2006, all maritime services 8 are subject to the European Commission’s competition jurisdiction by virtue of Regulation 1419/2006 9 and the repeal of the pre-existing regime embodied in Regulation 4056/86. However, a two-year transition period was allowed for liner conferences which met the conditions of Regulation 4056/86 at the time of the entry into force of Regulation 1419/2006 (i.e. 18 October 2006). Therefore, since 18 October 2008, 10 the liner conference 11 block exemption in Regulation 4056/86 no longer exists and Regulation 1419/2006 12 is the relevant regulation along with Regulation 1/2003. 13 This means that EU competition law applies to the maritime transport sector in full so that the European Commission may now apply EU competition law to the shipping sector in its entirety. 14 It also means that the liner conferences operating in the context of the EU could no longer do so. 15 The radical nature of the change is clear from the fact that liner conferences had operated for over 130 years and were brought to an end, as far as the EU is concerned at least, by this new regime. The repeal of Regulation 4056/86 was the lifting of the EU competition kimono on the sector. Now, the general EU competition law
regime (including Regulation 1/2003) 16 applies to the shipping sector in its entirety (including cabotage and tramp services where there is an effect on trade between EU Member States. While the full rigours of EU competition law applied to the sector since 18 September 2006, there was the two-year transition period and also a set of guidelines 17 which were specific to the sector and applicable until 26 September 2013 but those guidelines are now no longer in force 18 so even the sector specific guidelines have been removed so the general competition rules apply fully to the sector.
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