News
Hong Kong's Competition Commission issued Tuesday a block exemption order (BEO) under section 15 of the Competition Ordinance for vessel sharing agreements (VSAs) between liner shipping companies.
The commission has issued the order in response to an application for a BEO from the Hong Kong Liner Shipping Association (HKLSA), which was submitted to the commission in December 2015.
The order declares that activities usually undertaken pursuant to VSAs are excluded from the application of the First Conduct Rule in the Competition Ordinance subject to certain conditions, which include the following:
- The parties to the VSA do not collectively exceed a market share limit of 40%;
- The VSA does not authorize or require shipping lines to engage in cartel conduct; and
- Shipping lines are free to withdraw from the VSA without incurring a penalty on giving a reasonable period of notice.
The commission has decided not to issue a BEO for VDAs or the revised VDA scope which was proposed by the HKLSA in a supplementary submission to the commission, on the basis that it was not demonstrated that the relevant VDA activities meet the terms of efficiency exclusion.
