WASHINGTON — P3 carriers are betting their proposed network if allowed to proceed in the spring as planned won’t draw the ire of European Union antitrust authorities long after deployment.
“There is no time frame (for when EU authorities must decide whether to block the agreement) because in the EU P3 is not considered to be a merger,” Hubert de Broca, directorate general for competition, Antitrust-Transport, Post and Other Services, said on Tuesday in Washington after meeting with his U.S. and Chinese counterparts in a regulatory summit hosted by the Federal Maritime Commission. “Under the EU regime, the companies do not have to wait for any decision from us, so the P3 parties can implement their agreements now if they want.”
Unlike under U.S. law, the proposed vessel-sharing agreement can be allowed to take effect immediately in the EU, de Broca said. The FMC has a limited period to decide whether to allow the proposed alliance among the three largest container lines to proceed or ask a federal judge to issue an injunction. If the FMC allows the P3 to go forward, it has the authority to seek an injunction later if it believes the alliance has violated U.S. shipping law.
Reflecting the intense regulatory scrutiny on the P3, the FMC on Dec. 5 sought additional information from Maersk Line, Mediterranean Shipping Co. and CMA CGM about the proposed alliance, which covers the carriers’ services on the three east-west trades. The request stopped the clock on the agency’s review. Once the carriers respond to the FMC’s questions, a new 45-day regulatory period will begin, and the carriers can take as long as they want to respond to the FMC’s questions.
In Europe, if regulators at any time determine the P3 Network violates Article 101 of the Treaty on the Functioning of the EU, then they will issue a statement of objections, de Broca said at the FMC summit on Tuesday. The meeting, dubbed the Global Regulatory Summit, allowed regulators to discuss the potential impact of carrier alliances and vessel-sharing agreements.
If issued, a statement of objections from the EU could be more than a year in the making and would state how authorities believed the carriers violated antitrust rules. If European regulators took such a step, the P3 carriers could respond with comments. The EU would dissolve the consortium if the comments didn’t change their stance, and fines against the carriers likely would follow. EU antitrust regulators also could dissolve the P3 years down the road if they found evidence that the network violated antitrust laws.
But de Broca stressed that such a path was still hypothetical. “We are far from a situation where we would know whether we want to object to” the P3, he said.
The EU, he said, is now collecting information from the P3 carriers and stakeholders “to see if there are concerns that should lead to an investigation.” Because the P3 would have larger than a 30 percent market share on the trans-Atlantic and Asia-Europe trade lanes, the proposed consortium does not automatically receive antitrust clearance.
Consortiums that control less than 30 percent of the market and meet other requirements don’t automatically prompt EU authorities to take a closer look. The alliance would represent approximately 42 percent of Asia-Europe capacity, 24 percent of trans-Pacific capacity and 40 to 42 percent on the trans-Atlantic, according to the FMC.
But exceeding the 30 percent threshold doesn’t mean the P3 would run afoul of EU authorities. It means only that authorities will take a closer look. The EU also is looking into the recently announced expansion of the G6 Alliance — comprising APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL — into the trans-Atlantic lanes. The alliance also wants to expand in the Asia-U.S West Coast lane.
FMC Commissioner Mario Cordero, de Broca and Li Hongyin, deputy director-general of China’s Bureau of Water Transport, said the summit allowed regulators to better understand how the others address carrier alliances. Cordero said he called for the summit, the first of its kind for the FMC, because “the rapidly changing face of the international maritime sector demands ‘out of the box’ thinking. Cordero, a Los Angeles Dodgers fan, likened FMC commissioners and visiting regulators to baseball umpires.
“We did not make any calls today. No one was thrown out of the game. Our respective leagues have different rules, but we have the same players,” he said. “Today we begin a dialogue, an exchange of views and sharing of information.”
The trio said they were interested in meeting again to discuss global regulatory issues.