Maersk Line Settles Competition Case with Russia’s FAS

2017-02-12 17:50:27 ks 14

Danish boxship giant Maersk Line has reached an agreement today with the Federal Antimonopoly Service of the Russian Federation (FAS) to settle a competition case regarding Maersk Line and other shipping lines’ use of price announcements to the Russian market.

As explained, the deal is subject to payment of a settlement fee worth USD 230,000 by Maersk Line. Furthermore, the previous FAS decision on a fine of approximately USD 12 million will be terminated, the shipping company said in a release.

The case was launched in 2013 and concerned behavior which is legal in other jurisdictions.

Danish carrier stressed that this behavior was previously investigated by the EU and not deemed an infringement of EU Competition Law. The investigation concerned behavior of fifteen container shipping companies, including Maersk.

The European Commission claimed that since 2009, major global container shipping companies had been making regular public announcements on price increases for transport services on routes to and from Europe, signaling future price intentions to each other and harming competition.

The carriers in question also included China Shipping, CMA CGM, COSCO, Evergreen, Hamburg Süd, Hanjin, Hapag Lloyd, HMM, MOL, MSC, NYK, OOCL, UASC and ZIM, according to the EC.

However, Maersk said that FAS found no evidence of cartel behavior in the case. Under a unique provision in Russian Competition Law, FAS had initially concluded that Maersk Line and the other shipping lines’ use of price announcements constituted a non-cartel concerted action.

“The case concerned a unique Russian provision that does not exist in other countries. This agreement shows the commitment of both parties to find a solution that creates clarity for the future. We look forward to continuing our engagements in Russia”, says Camilla Jain Holtse, Head of Competition Law at Maersk Line.

Under the proposed deal, Maersk Line will cease public price announcements for cargo to Russian ports. Instead, it would inform its customers of prices or Russia specific corridors via email or a password protected webpage.

Further, Maersk Line has offered and will sign up to voluntary industry guidelines for price announcements.

The company added that the guidelines are also aligned with the principles Maersk Line voluntarily adopted when the EU Commission in July 2016 closed its competition case, finding no infringement of EU competition law in 14 shipping lines’ use of price announcements.

“We welcome FAS’ decision to opt for international regulatory standards. FAS has recognised the global nature of liner shipping and the compelling need for a coherent regulatory approach. This is a very positive international precedent as it supports our global industry to apply an aligned global regulatory approach,” adds Jain Holtse.