EU TO LIFT SHIP LINES ANTITRUST EXEMPTION

EU TO LIFT SHIP LINES ANTITRUST EXEMPTION

A group of North Atlantic shipping lines will lose its antitrust immunity to quote inland freight rates by the end of the week, the European Union's competition commissioner said Wednesday.

"We are going to continue the process of lifting the lines' immunity," Karel Van Miert said, exposing the carriers to heavy fines by the commission if they are found to be in breach of EU competition law.Attorneys representing the Trans-Atlantic Conference Agreement, however, disputed the commission's ability to immediately levy fines.

Carriers should be able to continue setting rates without risking fines while waiting for an appeal to be heard, a process that could take several years, attorneys said. Traditionally, any company challenging a Brussels decision in the courts has been protected from financial penalties.

Mr. Van Miert's decision to hold to the original deadline of midnight Friday signaled a further ratcheting up of one of the most complex, politically charged dossiers handled by his department, the competition directorate known as DGIV.

The European Commission has been battling with the carriers for almost two years over rate-setting practices. DGIV has not budged from its position that the group antitrust exemption for liner shipping conferences in a 1986 EU regulation only permits price fixing for sea transport and not for inland haulage.

Mr. Van Miert on Wednesday also rejected a request by the member lines of TACA, successor to the Trans-Atlantic Agreement, for a four-week extension of the deadline to respond to the commission's charge that member lines are acting unlawfully by collectively setting freight rates for road, rail and barge transport within Europe.

He expressed confidence he would eventually win the legal arguments against the shipping lines.

Mr. Van Miert said a recent ruling by the European Court of Justice, the European Union's highest legal authority, in favor of 15 member lines of the

Trans-Atlantic Agreement had no practical impact on the commission's challenge to its successor.

The commission lost an appeal against an earlier court ruling suspending a ban on the TAA's filing inland rates.

But that ruling did not concern the substance of the commission's case against the TAA for breaching the EU's competition rules, Mr. Van Miert said.

"I am confident we took the right decision (to outlaw the TAA)," Mr. Van Miert said of the commission's position that the group's antitrust exemption doesn't apply to inland haulage.

Lawyers for the TACA lines, however, said last week's court judgment has seriously weakened the commission's stance. "Given the recent ruling, the

commission doesn't have a leg to stand on," a Brussels-based TACA lawyer said.

"But I don't think the commission cares . . . they just want the lines to move," he said.

Both sides are now looking to the European Court in Luxembourg for final resolution of the inland rate-setting controversy, while they go through the necessary legal procedures in Brussels.

The TACA lawyers are not seeking an oral hearing with the commission next month to elaborate their case. "We think the issues are so simple we can respond very quickly on a few small legal points," one said.

Even as the two sides slug it out, they are making headway in talks aimed at establishing the competition ground rules for liner shipping.

Shippers, who filed the antitrust complaints against the TAA and other conference agreements, also have been involved in informal talks with the shipowners and the commission about inland transport services that could be offered jointly by shipping lines through their newly created consortia. While shippers oppose joint pricing of inland transport services, they favor cooperation in other areas.