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   Sir   Leon   Brittan,  the  Member  of  the   Commission   with   special
   responsibility   for  competition  policy,  presented  to   the   Council
   (Transport),  at  its  meeting  on  18  and  19 June 1990,  a  Commission
   communication  proposing that a group exemption be granted under  Article
   85(3) of the EEC Treaty for consortia agreements.
   In  presenting  this  communication,  the  Commission  is  honouring  the
   undertaking it gave to the Council to examine the possibility of granting
   a  block  exemption for such agreements at the time of  the  adoption  of
   Council  Regulation (EEC) No 4056/86 laying down detailed rules  for  the
   application  of Articles 85 and 86 of the Treaty to  maritime  transport.
   The communication will help to remove soon the current legal  uncertainty
   over this type of agreement with regard to competition law.
   Sir  Leon  Brittan also presented, as an annex to  the  communication,  a
   proposal for a Council Regulation empowering the Commission to grant  the
   block  exemption  for consortia agreements,  including  those  containing
   provisions   relating   to  multimodal   transport   (combined   sea/land
   The  main  grounds for the Commission's block exemption proposal  are  as
     (i)  the  development  of  container services  in  the  liner  shipping
          industry   over  the  last  decade  has  increased  pressure   for
          cooperation  between economic operators because of the high  level
          of  capital  investment required to provide  such  services.  This
          cooperation  normally takes the form of joint  service  agreements
          (consortia) between shipping lines.
    (ii)  However,  these agreements restrict competition between  consortia
          members and affect trade between Member States.  Were they not  to
          be  covered  by  an exemption, such agreements would  have  to  be
          considered automatically void in accordance with Article 85(2)  of
          the  EEC Treaty.  Given  the  number of  consortia  agreements  in
          existence,  the  Commission is proposing that they  be  granted  a
          block exemption.
                                     - 2 -
   (iii)  This  exemption  would  be  justified  since  the  consortia   are
          providing  the necessary means for improving the  productivity  of
          liner  shipping services and are helping to promote technical  and
          economic  progress by facilitating the use of containers.  At  the
          same  time,  they  enable users of  the  liner  shipping  services
          offered  by  consortia  to  benefit from a  number  of  the  major
          advantages  stemming  from the improvements  in  productivity  and
    (iv)  In  order to ensure that the requirements of Article 85(3) of  the
          Treaty  are  met, however, it will be necessary to attach  to  the
          block exemption certain specific conditions and obligations so  as
          to guarantee that a fair share of the benefits resulting from  the
          productivity improvements achieved by the consortia are passed  on
          to users and that competition in respect of a substantial part  of
          the trade in question is not eliminated or unduly restricted.
     (v)  Details of the arrangements for the block exemption, including the
          abovementioned conditions and obligations, will be given following
          further  consultations  with  the  parties  concerned  and  Member
    (vi)  The  proposed  block exemption also covers consortia  which  offer
          multimodal services (combined sea/land transport).  In view of the
          fact  that  Regulation (EEC) No 4056/86 applies only  to  maritime
          transport, the proposed block exemption cannot take the form of  a
          simple amendment to that Regulation but will have to be granted by
          means  of  a separate Regulation which will take  account  of  the
specific features of this type of cartel agreement.

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