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 transport). The main grounds for the Commission's block exemption proposal are as follows: (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 service. (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 States. (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 thespecific features of this type of cartel agreement.