MyCC Grants Conditional Block Exemption For Liner Shipping Agreements

KUALA LUMPUR, June 21 (Bernama) -- The Malaysia Competition Commission (MyCC) has decided to grant a block exemption for liner shipping agreements for vessel-sharing agreements (VSAs) and voluntary discussion agreements (VDAs) within Malaysia or effecting on liner shipping services in Malaysia.

In a statement today, MyCC said, the exemption was subjected to no condition of price fixing, price recommendation or tariff imposition by any person on transport users.

MyCC said the Block Exemption Order (BEO) shall commence on July 7, 2017 for a period of two years or until it cancelled it.

The decision was made upon consideration and feedback from public, industry stakeholders and relevant government ministries over the past 30 days from 11 May.

In 2014, MyCC granted a three-year block exemption for liner shipping agreements due to expire on July 6, 2017. The renewal application for the VSA and VDA block exemption for liner shipping services was submitted by the Malaysia Shipowners Association and the Shipping Association of Malaysia on March 6, 2017, it said.

The MyCC, under subsection 8(1) of the Competition Act 2010 (the Act), may grant a block exemption provided all conditions under section 5 of the Act were satisfied cumulatively, namely significant identifiable efficiency benefits arising from the liner shipping agreements and could not be provided reasonably by the parties to the agreement without having the effect of preventing, restricting or distorting competition.

Others include the detrimental effect of the agreements on competition proportionate to the benefits provided and does not allow liner operators to eliminate competition completely to a substantial part of the liner shipping services.

It said the BEO, however, would not exempt or provide immunity to any abuse of dominant position under Section 10 of the Act.

"Therefore, parties to a liner shipping agreement can still be found liable for an infringement if found to abuse their dominant positions in the liner shipping marke," it said.

MyCC said the BEO did not cover inland carriage and warehousing of goods.

"In addition, the BEO allowed liner shipping operators to offer, on the basis of individual confidential contracting, their own service arrangements, upon certain conditions," it added.

-- BERNAMA