Antitrust: Articles 85 and 86 of the EC Treaty

296 Pages·1998·0.86 MB·English

ANTITRUST
I - Antitrust: Articles 85 and 86 of the EC Treaty - Articles 65 and 66 of the
ECSC Treaty
A - Case summaries
1. Prohibitions
1.1. Horizontal agreements
a) Information exchange
Wirtschaftsvereinigung Stahl
On 26 November the Commission adopted a decision under Article 65 of the ECSC Treaty prohibiting
an information exchange system notified by Wirtschaftsvereinigung Stahl, the German steel industry
association. The system, which had not been implemented, provided for the exchange between
association members of sensitive, recent and individualised data on supplies of more than 40 steel
products in the various Member States, broken down by steel quality. The exchange would also have
concerned the breakdown by consumer sector and the market shares of member companies on the
German market. The leading German steel producers were to have participated in the system.
After analysing these homogeneous product markets in detail, the Commission drew a distinction
between two types of market. It raised no objection to the exchange of sensitive information on
dispersed markets. On the other hand, it did prohibit the exchange of data on all markets for flat
products and on the markets for beams, sheet piling, permanent way material and wire rod of stainless
steel. These are concentrated markets characterised by low import penetration, stable trade flows
between Member States and chronic overcapacity.
The notified information exchange agreement would have restricted competition between the parties by
increasing market transparency to such a degree that any independent competitive action on the part of
one company would have been noticed immediately by its competitors, which would have been able to
take suitable retaliatory measures such as systematically canvassing customers or offering temporary or
local selective discounts. This increased transparency would thus have been liable to deter companies
from trying to increase their market shares, a fundamental competitive activity. In addition, the
frequency of the exchange, i.e. monthly, and the freshness of the data exchanged (one month old) would
have reduced considerably the time during which a company could have derived any benefit from
behaving competitively.
The decision is consistent with the Commission’s practice,1 which has been upheld by the Court of First
Instance,2 of viewing as anti-competitive any systems involving the exchange of sensitive, recent and
individualised data on a concentrated market in homogeneous products.

1 1997 Competition Report; Commission Decision 92/157/EEC of 17 February 1992 relating to a proceeding
pursuant to Article 85 of the EEC Treaty - UK Agricultural Tractor Registration Exchange, OJ L 68, 13.3.1992.
2 Judgments in Cases T-34/92 Fiatagri UK Ltd and New Holland Ford Ltd v Commission [1994] ECR II-905 and
T-35/92 John Deere Ltd v Commission [1994] ECR II-957.
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2. Authorisations
2.1. Horizontal agreements
a) Strategic alliances
GEN (Global European Network)
Following substantial changes to the notified arrangements, the Commission gave negative clearance
(by comfort letter) to the Global European Network (GEN) agreement aimed at improving the quality
of trans-European network telecommunications services.
The GEN agreement was originally signed by British Telecom, Deutsche Telekom, France Télécom,
Telecom Italia and Telefónica de España, and now includes all the major European telecommunications
operators (TOs). It creates a high-quality, high-capacity (2Mbit/s) fibre optic telecommunications
network between the signatories’ nodes using plesiosynchronous digital hierarchy (PDH) technology.
The network will improve the speed of circuit provision, repairs, network availability and the quality
and reliability of service.
As notified, the agreement posed a number of problems from the competition point of view and required
amendment before the Commission could adopt a favourable attitude. The main changes were:
* the collective price-fixing arrangement which was planned between the TO signatories has been
dropped and each signatory will therefore negotiate the conditions under which it will give access to its
GEN capacity on a bilateral basis;
* third parties were excluded from access to GEN capacity and could thus not benefit from the
technical advantages it presents; each signatory has now undertaken to offer in its public tariff access to
GEN capacity on a non-discriminatory basis to all third parties.
In view of these changes and the benefits which trans-European telecommunications can bring, the
GEN agreement as such could be cleared.
The Commission must, however, at the same time continue to closely scrutinise agreements such as
GEN which involve dominant operators in order to ensure the development of pro-competitive
structures. In particular, the conditions under which third parties can access European leased lines
remain a strong concern. For that reason, the Commission has warned the parties that the negative
clearance of GEN does not mean that signatories may abuse their dominant positions with respect to the
provision of leased lines, notably by charging excessive and/or discriminatory prices, and that
individual proceedings under Article 86 would be brought against TOs if such abuses were found to be
taking place.
At the same time, the Commission is examining the application of the Open Network Provision (ONP)
principles of cost orientation and transparency in Member States in the context of the ONP leased line
Directive.
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b) Joint ventures and other forms of cooperation
- Joint ventures
Carnival + Airtours3
A joint venture between Carnival Corporation (United States) and Airtours plc (United Kingdom),
whereby they acquire joint control over Costa Crociere SpA, the leading Italian cruise company, was
cleared by a comfort letter issued on 21 April. The joint venture, which was notified on 25 March, was
judged by the Commission to be of a structural cooperative nature and was therefore dealt with under
the accelerated procedure.
Carnival Corporation is the leading cruise company in the world, its business being predominantly in
North America. Airtours operates within the leisure travel industry in the United Kingdom, Scandinavia
and North America. Its current cruise operations in Europe are in the United Kingdom and
Scandinavia. Costa is the largest European cruise company, being active in Italy, France and Spain.
In line with its Decision of 9 July 1993 in Case No IV/M.334 - Costa Crociere/Chargeurs/Accor, the
relevant market was considered to be the market for cruises offered in each Member State, taking into
account the importance to customers of this holiday concept, which cannot easily be offered via other
types of organised holiday. The Mediterranean market, and especially Italy and France, were affected
by the operation.
In Europe an estimated 1 075 000 passengers chose a cruise holiday in 1996. The UK market is the
largest with 422 000 passengers in 1996, followed by Germany with 254 000 passengers and Italy with
186 000. The other countries together accounted for the remaining 213 000 passengers. However, it
should be borne in mind that consumer preferences are not the same everywhere. Whereas in France,
Italy, Germany and the United Kingdom between 139 000 and 422 000 passengers went on a cruise
holiday in 1995, in Scandinavia and Spain the corresponding figure was only 25 000 and 27 000
respectively. The Commission concluded in its 1993 Decision that, whereas more than 65% of Italian,
French or Spanish passengers preferred the Mediterranean, no more than 30% of German or British
tourists opted for a Mediterranean cruise.
The Commission took the view that the agreements restricted competition, because Carnival and
Airtours agreed to limit their future growth in the Italian and French markets in order to allow Costa to
continue developing its presence there. However, it also took the following aspects into account: (1) the
joint acquisition by Airtours and Carnival of Costa improves the promotion and distribution of the
Costa products offered to customers, while Italian and French customers will be able to benefit from
wider promotions of Airtours’ and Carnival’s cruises; and (2) the joint venture will also be able to
benefit from Airtours’ competitive strategy of introducing low-cost cruises, which has led it to
demonstrate that it can make cruising more affordable and more widely available to holidaymakers.

3 IV/36.414.
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Michelin + Continental4
Michelin and Continental notified their cooperation agreements in 1995. These agreements provided for
the setting-up of a joint venture and for additional cooperation in the following areas: recycling and
retreading of tyres, creation of wheel/tyre assembly shops dedicated to car manufacturers' facilities,
joint creation of a new franchising concept, cooperation in logistics, and joint purchasing of raw
materials. Michelin has transferred to the joint venture the rights in the Uniroyal trade mark and the
joint venture has granted a licence of unlimited duration to Continental to use this trade mark. In return,
Continental has transferred to the joint venture its low-cost-tyres production facility in Eastern Europe
(SAVA). The tyres produced will be sold to Michelin and Continental, to be marketed separately by
each of them under their own brand name. Michelin and Continental have amended their agreements in
order to dispel any suspicion of cooperation in the distribution sector and have given up their joint
franchising project.
The Commission published a notice under Article 19(3) of Council Regulation No 17.5 The comments
received were not such as to alter the overall favourable assessment of the notified operation. On
18 July the Commission authorised the cooperation between Michelin and Continental by comfort
letter, the parties having satisfied it that the conditions of Article 85(3) were met.
Continental and Michelin have been advised that any sign of cooperation between them going beyond
the scope of the agreements as notified will be closely scrutinised and might even induce the
Directorate-General for Competition to reconsider the content of the comfort letter.
Sanofi+Bristol-Myers Squibb6
On 28 October the Commission approved the creation of a joint venture in the pharmaceutical sector
between the French company Sanofi and the US company Bristol-Myers Squibb. The purpose of the
cooperation is to develop, manufacture and sell two new chemical entities in the cardiovascular area,
Clopidogrel and Irbesartan, and the products derived therefrom.
One of the joint venture products (the anti-platelet drug Clopidogrel) is intended to prevent blood from
clotting in patients who have suffered a heart attack, stroke, etc., while the other product (the
angiotensin II receptor antagonist Irbesartan) is intended for the treatment of high blood pressure.
The products have been jointly developed by the parties, each of them having devoted considerable
financial and other resources. A jointly owned company, Sanofi Pharma Bristol-Myers Squibb SNC,
will be responsible for putting the products on the market in the European Union. Distribution will be in
the form of co-marketing or co-promotion, depending on the regulatory and commercial conditions in
the relevant country.
The parties’ activities in these fields are complementary, with only marginal overlap, and the
Commission found that the joint venture will not appreciably restrict competition between the parties.
Moreover, considering the generally competitive market structures and the existence of important
generics, the joint venture is not likely to have any appreciable restrictive effect on third parties.

4 IV/35.522.
5 OJ C 236, 14.8.1996.
6 IV/36.610.
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The case was dealt with under the Commission’s accelerated procedure for structural joint ventures and
the parties received a comfort letter within two months of completing their notification.
Scandairy7
On 28 July the Commission approved the creation of Scandairy K/S, a joint venture in the dairy sector
between the Swedish dairy cooperative Arla ekonomisk förening and the Danish dairy cooperative MD
Foods amba, but only after its scope had been severely reduced.
The joint venture is based in Denmark and its objects are to research, develop, produce and market
dairy products in the form of functional food products, i.e. products marketed as having components
incorporated which entail a physiological function in addition to normal nutritional properties
(e.g. lowering of cholesterol levels). The joint venture has also acquired the rights to MD's range of
functional food products sold under the Gaio trademark. Geographically, it will initially target northern
Europe, with a view to eventually covering the whole of the European Union.
MD dominates the Danish dairy sector, while Arla occupies a similar position in Sweden. The parties
originally envisaged a joint venture extending also to dairy-based snacks and desserts, but following
serious doubts expressed by the Commission as to the joint venture's compatibility with the competition
rules they decided to exclude these products from the cooperation. The joint venture was thereby limited
to a new product area which is rapidly developing and where product development requires
considerable investment, to the exclusion of conventional dairy products.
The Commission accordingly considers that the agreements are, at least during a launch period,
compatible with the competition rules. The parties have, however, been informed that the agreements
will be re-examined in the light of any new circumstances which might alter this assessment, and in any
event after a period of seven years. To this end the parties have been invited to submit a report on the
operation of the agreements by the end of 2003, on the basis of which it can be determined whether the
favourable view of the arrangements should be maintained.
Hydro Texaco Holdings A/S - Preem (formerly OK Petroleum AB)
On 1 December 1995 Hydro Texaco Holdings A/S (Hydro Texaco) and Preem (formerly OK
Petroleum) notified the Commission of the creation of a cooperative joint venture (Scanlube) for the
production of lubricants.
Preem is a Swedish company which carries on a number of activities in the oil sector, from exploration
to the distribution of refined products, fuels and lubricants. Hydro Texaco is a Danish company active,
among other things, in the distribution of fuels and lubricants and in the operation of service stations. It
is a subsidiary of Norsk Hydro and Texaco and does business in Denmark, Norway and Iceland.
On 22 November 1995 Hydro Texaco and Preem entered into several agreements relating to the
formation and operation of Scanlube, a joint venture in which each shareholder holds 50% of the
capital. In particular, Preem transferred to Scanlube the lubricants plant it used to operate on its own
in Gothenburg, Sweden. The aim of the joint venture is to purchase base oils, additives, packaging

7 IV/ 35.855.
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materials and other supplies and to produce and package lubricants for sale to the shareholders.
Several other agreements concerning the day-to-day running of the joint venture were concluded
between Hydro Texaco or its subsidiaries, Preem or its subsidiaries and/or the joint venture. Under a
lubricating oil production technology agreement, Texaco Development Corporation grants to the joint
venture a licence to use Texaco’s lubricating oil production technology.
In addition, a trade mark licence and distribution agreement has been concluded between Texaco
International Trader and Preem. By this agreement, Texaco International Trader grants Preem an
exclusive licence to distribute lubricants apart from marine lubricants under the Texaco trade marks in
Sweden. The Commission considered that this agreement was not ancillary to the formation of the joint
venture and decided to examine it separately.
The Commission concluded that Scanlube was not a full-function joint venture and that its formation
should be examined pursuant to Council Regulation No 17. After an initial examination of the planned
operation, the Commission informed the parties that it considered that it fell within Article 85(1) of the
EC Treaty and that some clauses in the notified agreements contained non-indispensable restrictions of
competition that would bar the application of Article 85(3).
Following talks with the Commission, the parties made new proposals whereby the clauses containing
the restrictions of competition were withdrawn or modified. The parties thus remain free to produce
lubricants anywhere they wish and to obtain them from any source, including from other countries. The
Commission published a notice under Article 19(3) of Regulation No 17 inviting interested third parties
to submit their comments.8 No such comments were forthcoming.
The Commission’s departments sent the parties two comfort letters, one concerning the formation of the
joint venture and the other concerning the distribution agreement.
HFC Bank plc/British Gas Trading Ltd
On 14 February HFC Bank and British Gas Trading Ltd (BGT) notified an agreement establishing a
joint venture, Goldbrand Development Ltd (GDL), for the launch of the Goldfish Card in the
United Kingdom. Under a scheme to be operated by GDL, cardholders are to be awarded points for
using their cards (including for the payment of BGT domestic gas bills) which will be redeemable in a
number of outlets. With the gradual liberalisation of the market for the supply of gas to domestic
customers and the consequent emergence of new entrants, the main competition concern was whether
BGT’s role as a redemption partner of GDL could constitute an abuse of its dominant position on the
market under Article 86 of the EC Treaty by effectively tying in existing customers or at least
substantially reducing the probability that they would switch suppliers.
In April DG IV wrote to Ofgas, the UK gas regulator, asking for its views on the likely impact of
Goldfish on competition. In June Ofgas replied that it was also investigating the Goldfish Card and to
that end had already published a public consultation document. DG IV then decided to await Ofgas’s
decision on Goldfish before drawing any final conclusions.
In its October decision document Ofgas found that any tie-in to BGT caused by Goldfish would be very
limited in scope since any customer switching supplier could redeem points he had already accumulated

8 OJ C 47, 15.2.1997.
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against his closing BGT gas bill. In addition, if the number of points exceeded the amount due to BGT,
the customer would receive a full refund of the net credit. At Ofgas’s request, BGT agreed to feature
this facility more prominently in its literature.
DG IV agreed with Ofgas’s findings, and after further analysis of market data gathered during the
course of the investigation decided to close the case by way of a negative clearance type comfort letter.
Unisource and Uniworld
On 29 October the Commission approved the creation of the two telecommunications alliances
Unisource and Uniworld.9 Unisource is a joint venture between Telia of Sweden, PTT Telecom of the
Netherlands and Swiss Telecom, while Uniworld is a joint venture between Unisource and the US
carrier AT&T. Following its investigation, the Commission found that the agreements fell within the
scope of Article 85 of the EC Treaty. Subject to changes to the agreements and restrictions on the
parties’ conduct, the creation of the two alliances was approved as the Commission found that the
existing dominant positions of the three Unisource shareholders on many of their home markets would
not be strengthened. This approval followed the clearance of the earlier alliances between BT and MCI
(Concert) and France Télécom, Deutsche Telekom and Sprint (Atlas/GlobalOne). The decisions came
two months before the full liberalisation of telecommunications across most of Europe on 1 January
1998.
The inclusion of Telefónica in the Unisource alliance is not covered by the relevant decision as
Telefónica has since announced its withdrawal from the alliance. The decision will be reviewed if the
assumptions on which the Commission based it prove incorrect. Similarly, it does not cover any entry
by STET of Italy into an alliance with the two joint ventures, a possible development which has
recently been announced.
Unisource has activities in carrier services, mobile telephony and calling cards, satellite services and
corporate telecommunications (both data and voice). These are carried on through operating
subsidiaries. Approval of the exclusive distribution arrangements of Unisource Business Networks,
Unisource Voice Services and Unisource Satellite Services is also covered by the decision.
The exemption will last for five years from the date of the liberalisation of alternative networks on
1 July 1996. It will therefore be valid until 30 June 2001.
The conditions attached to the Unisource agreements include undertakings to prevent discrimination by
the parent companies in respect of leased lines and interconnection and to prevent the misuse of
confidential information, cross subsidies between Unisource and its parent companies and the tying or
bundling of services. In addition, the Commission has confirmed with the Governments of Sweden and
the Netherlands the implementation of the EU’s telecommunications liberalisation programme, and in
the case of Switzerland the Swiss Government has confirmed inter alia the liberalisation of
telecommunications by 1 January 1998.
Similar undertakings were given by the parties to the Uniworld transaction in respect of
non-discrimination, no misuse of confidential information and the prevention of cross subsidisation and

9 OJ L 318, 20.11.1997.
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of tying of services. In addition, AT&T indicated to the Commission that, for traffic sent as part of the
bilateral correspondent regime, it would offer European telecommunications operators cost-based
accounting rates that would be no higher than the lowest accounting rate established between AT&T
and any Unisource shareholder. The Uniworld arrangements are also exempted for five years.
- Other forms of cooperation
British Dental Trade Association10
In its decision of 11 July 198811 the Commission exempted the rules and regulations laid down by the
British Dental Trade Association (BDTA) in connection with dental product and equipment exhibitions,
after the BDTA had removed all discrimination between members and non-members of the association
for future exhibitions. The exemption expired on 15 December 1996. On 20 February the Commission
issued an exemption by comfort letter for BDTA’s current rules and regulations (very similar to those
applying in 1988) after having examined whether access to the BDTA’s exhibitions had been fair and
open since the 1988 exemption decision for undertakings from other Member States, especially those
not represented in the United Kingdom by a BDTA member.
Joint Operational Service Agreement12 and
West Coast/Mediterranean Agreement13
On 5 March the Commission adopted decisions not to oppose exemption for the Joint Operational
Service Agreement14 and the West Coast/Mediterranean Agreement15 and accordingly allowed both
agreements to benefit from the block exemption for liner shipping consortia contained in Regulation
870/95.16
In accordance with Article 7 of Regulation 870/95, if the Commission does not wish a notified
agreement to benefit from the block exemption, it has six months from the date of notification to inform
the parties that it wishes to oppose exemption. In both cases, further information was requested from
the parties and was received on 7 October 1996. As the Commission has decided not to oppose
exemption, the two agreements will be exempt for the life of the Regulation, i.e. until 21 April 2000.
The parties also obtained the benefit of Article 13 of the Regulation.
The parties to the Joint Operational Service Agreement (JOS) are Andrew Weir Shipping Ltd (trading
as Ellerman), Iscont Lines Ltd, KNSM Kroonburgh and Zim Israeli Navigation Ltd. The JOS is a joint
liner shipping service between the ports of Felixstowe, Antwerp, Rotterdam and Hamburg and the port
of Limassol in Cyprus and the ports of Ashdod and Haifa in Israel. The parties agree on the amount of
capacity to be used in the joint service and currently operate four vessels offering a fixed-day, weekly

10 IV/31.593.
11 OJ L 233, 23.8.1988; see also 1988 Competition Report, point 66.
12 IV/35.770.
13 IV/35.774.
14 IV/35.770.
15 IV/35.774.
16 On 20 April 1995 the Commission adopted Regulation 870/95 (OJ L 89, 21.4.1995), which grants a block
exemption to liner shipping consortia offering international maritime liner services from one or more Community
ports. Liner shipping consortia are agreements between shipping companies the object of which is to bring about
cooperation for the joint operation of a maritime liner transport service by means of various arrangements. The
block exemption expires on 21 April 2000 (See IP/95/409).
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service to each of the six ports of call. Two of the vessels are provided by Zim, one by Iscont and one
jointly by Ellerman/KNSM. The relevant market in this case is scheduled maritime transport services
between ports in northern Europe and ports in Cyprus and Israel.
The parties to the West Coast/Mediterranean Agreement (WC/Med) are Andrew Weir Shipping Ltd
(trading as Ellerman), KNSM Kroonburgh BV and Zim Israeli Navigation Ltd. The WC/Med is a joint
liner shipping service between the ports of Liverpool and Dublin and the ports of Lisbon, Leixoes,
Malta, Palermo, Salerno, Piraeus, Limassol in Cyprus and Ashdod and Haifa in Israel. The parties
agree on the amount of capacity to be used in the joint service and currently operate three vessels
offering a service every ten days to each of the eleven ports of call, except that Lisbon and Leixoes are
called at on alternate sailings. One of the vessels is provided by Zim and two by Ellerman/KNSM.
These services cover two distinct markets: (i) services between northern European/Portuguese ports and
central Mediterranean ports and (ii) services between northern European/Portuguese ports and ports in
Israel and Cyprus. In the case of the market for transport services between northern
European/Portuguese ports and central Mediterranean ports some road haulage services may be
substitutable for maritime transport services as a result of a very wide range of ferry services.
Since there is a significant overlap between the markets in which the two consortia operate, it was
necessary to assess their combined market shares. For the reasons described below it was also
appropriate to take into account not only containerised cargo but also non-containerised cargo.
Almost all cargo can be containerised and, over time, it is likely that the degree of containerisation in
most maritime markets involving Member States will be very high. In mature markets, such as the
northern Europe/US or the northern Europe/Far East markets, the process of change towards
containerisation is more or less complete and few, if any, non-containerised cargoes are left which are
capable of being containerised.
Furthermore, once a type of cargo regularly becomes containerised it is very unlikely ever to be
transported again as non-containerised cargo. The reasons for this are that shippers become accustomed
to shipping in smaller but more frequent quantities and become accustomed to the fact that once cargo
has been loaded into a container, it is easier to ship onwards from the port of delivery to the ultimate
consignee using multimodal transport. Containerised cargo is also much more secure against pilferage.
Thus, as the degree of containerisation increases, shippers of non-containerised cargoes turn towards
containerised services but once those shippers have become accustomed to shipping in containers they
do not revert to non-containerised shipping. Such examples of one-way substitutability are not
uncommon.
Consortia arrangements between Sea-Land, P&O Nedlloyd, Maersk and OOCL17
(“Vesse-lSharing Agreements”)
On 3 September the Commission decided not to oppose exemption being granted pursuant to
Article 85(3) to consortia arrangements in the transatlantic trades between Sea-Land, P&O Nedlloyd,
Maersk and OOCL.

17 IV/36.282.
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The Vessel-Sharing Agreements (“VSA”) establish a liner shipping consortium between Sea-Land,
P&O and Nedlloyd18 in the northern Europe/US and Mediterranean/US trades. The consortium was
first established in March 1988.
The VSA parties are collectively party to further agreements with OOCL and Maersk under which
OOCL obtains slots from the VSA parties and slots from Maersk and under which the VSA parties and
Maersk obtain slots from each other. The arrangements have been authorised in the United States by
the Federal Maritime Commission. The VSA parties jointly operate nine vessels (which are owned and
crewed by Sea-Land).
The VSA arrangements involve trade shares within the meaning of Regulation 870/95 which are higher
than the 30% required by Article 6 of the Regulation for the application of the block exemption where
the consortium operates within a conference. The VSA arrangements also fail to satisfy one or more of
the conditions set out in Article 8 of Regulation 870/95, particularly those at Article 8(1) and 8(2)
concerning service contracts and notice periods.
It follows that the VSA arrangements fall outside the scope of the block exemption provided by
Regulation 870/95. The appropriate procedure was therefore the opposition procedure contained in
Article 12(1) of Regulation 4056/86 and Article 12(1) of Regulation 1017/68. In accordance with this
procedure, the Commission published a notice19 on 18 June summarising the application for exemption
and inviting interested parties to submit comments within thirty days from the date of publication.
The Commission’s analysis of the VSA was premised on Regulation 870/95 as regards the restrictive
nature of consortium agreements and the TAA Decision20 as regards the relevant market. On the basis
of this analysis, the Commission concluded that the VSA brings about the same benefits as those
brought about by consortia falling within the scope of the block exemption. The first three conditions of
Article 85(3) were accordingly considered to be fulfilled in respect of those activities of the VSA which
fall within the scope of the list of exempted activities contained in Article 3(2) of Regulation 870/95.
Although Regulation 870/95 provides for a maximum period of notice of six months for block
exempted consortia, the parties argued that a 24 months’ notice period was reasonable and
indispensable for the proper operation of the agreements considering the highly integrated nature of the
VSA and related agreements. For the purposes of the VSA, Sea-Land had made considerable
investments in the acquisition of vessels and P&O and Nedlloyd had contributed to financing those
investments. Furthermore, P&O, Nedlloyd and OOCL had agreed to withdraw their existing vessels
and to use Sea-Land’s vessels. The Commission accepted that these facts demonstrated the highly
integrated nature of the VSA and justified the long notice period.
The fourth condition of Article 85(3) was also considered to be fulfilled since the consortium has a
maximum market share of less than 40% and was thus considered to remain exposed to effective
competition.
However, the VSA parties, Maersk and OOCL had been informed that a number of provisions which
were not covered by the block exemption granted by Regulation No 870/95 could not be considered as

18 Nedlloyd and P&O merged their liner shipping activities in early 1997.
19 OJ C 185, 18.6.1997, see annex.
20 Trans-Atlantic Agreement, Commission Decision 94/980 of 19 October 1994, OJ L 376, 31.12.1994.
112 COMPETITION REPORT 1997