Thursday, October 8, 2015

Do General Rate Increases (GRI) in Liner Shipping Constitute Illegal Price-signaling?

Case Law is scarce, but it seems that the European Commission, following two cases (Netherlands and UK), is taking the correct approach, in spite of earlier rulings of the European Court of Justice (ECJ). To start with, and in the face of rate volatility following the abolition of conferences from EU trades, the advance notification of price changes is important to shippers, so that they can plan meaningfully their future  transportation costs. However, frequent price-signaling (carriers do this a few times a year) of non-finalized pricing decisions, which are followed by those of competitors (in concentrated industries like liner shipping), could well be seen as a coordinating strategy aiming at reducing business uncertainty. If it is indeed so, such practices are definitely illegal under EU competition law. HH