17 November 2023
On November 17th, the Competition and Markets Authority (CMA) published its provisional decision, stating that it will not recommend replacing the CBER (Retained CBER). The CMA believes that the retained CBER should expire on April 25th 2024, without a replacement.
The CBER provides an automatic exemption from competition rules for certain agreements among liner shipping companies and was retained in UK law after the withdrawal from the European Union.
The CMA initiated a review of the Retained CBER in August 2022 and initially proposed its replacement with a new exemption after consultations. However, the CMA reversed its recommendation, stating it will not advise replacement and will let the Retained CBER expire.
Conditions for recommending a replacement, according to the CMA, include certainty that consortium agreements meet the exemption conditions and sufficient benefits compared to self-assessment. The CMA concluded that it lacks certainty that consortia covered by the Retained CBER will produce efficiencies outweighing their potential impact on competition. Moreover, creating a new sector-specific exemption was deemed to provide insufficient benefits compared to self-assessment.
If the CMA's provisional decision becomes final, shipping companies involved in Consortia may need to consider alternative exemptions or conduct self-assessments of competition compliance. However, this decision is aligned to the one of the EU, but diverges from other jurisdictions, as Singapore and Hong Kong which renewed their relevant exemptions in 2021 and 2022.
The CMA is currently open to consultations and will make a final decision later.
Meanwhile, shipping companies should carefully assess the implications for their business and conduct self-assessments in preparation for the potential expiration of the Retained CBER in 2024.
The CMA provisional decision can be found here.