On Establishing Shipping Antitrust Exemption Regimes In China

The Initial purpose of international shipping antitrust exemption regimes is to provide a legal basis for the agreements, decisions and concerted behaviors between liner shipping companies, which are beneficial for stability of the shipping market, in order to reduce vicious competition. However, with the advance of immunity, the negative impact resulting from the monopolistic deeds of liner conference exceeds its active role plays in the process of stabilizing shipping markets. Meanwhile, with the transformation of shipping competitive forms, the measures of cooperation in management、vessel sharing and distribution of the affiliated ports adopted by shipping consortium,which are different from freight negotiation, have slighter restriction of competition, but also can play a stabilizing role in the shipping market. Thus, concerted actions taken by liner conference are not necessary; the aforementioned alternatives are more popular. In this context, the world’s leading maritime powers have launched a reassessment of their shipping antitrust immunity system and enforce the reform policies of shipping legislation. The EU has repealed the antitrust exemption of Liner Conferences after due investigation, the reform process is more racial; The Ocean Shipping Reform Act of 1998(“OSRA”) of the United States still acknowledges such exemptions while imposing strict restrictions on them, but under the impact of EU legislation reform, the US also launched a reassessment of shipping antitrust immunity system, cancellation of liner conference antitrust immunity by the Shipping Act which has yet to vote more or less predicts its shipping legislation tendency,while the reform process is more steady. Nevertheless, both the EU and US have actively granted antitrust exemptions to shipping consortium.Influenced by the reform of EU and US antitrust exemption regimes, China has also launched the discussion about whether to set up and how to set up shipping competition rules,especially shipping antitrust exemption regimes, but have not been able to reach a consensus. In fact, this dispute is also one of the important causes for the delay in shipping law promulgation. However, for joint cooperation in China’s shipping market, whether to exempt it, even how to exempt it, Chinese law hasn’t specified the problem, lacking legal basis. For instance, the exception rules in the Anti-Monopoly Law of the People’s Republic of China are too simple and lack of operability; some articles in the Regulations of the People’s Republic of China on international maritime transportation reflect shipping antitrust exemption rules, however, on one hand, they don’t prohibit some monopolistic behaviors; on the other hand, clear antitrust immunity have not been afforded. The articles are so vague that Causing inconvenience to the judicial practice.Therefore, the Shipping Act of China that future enacted should solve the following problems like whether to and how to set up international shipping antitrust exemption regimes; how to be consistent with Anti-Monopoly Law of the People’s Republic of China and Regulations of People’s Republic of China on international maritime transportation,etc. Based on above, this paper will describe the issues from following four aspects:The first part focuses on introduction to international shipping antitrust immunity system. It includes the generation、connotation、features and theoretical basis which support the shipping industry apply antitrust exemption system like: the inherent characteristics of shipping economy; the theory of “Empty Core Market”; coordination theory of shipping industry policy and competition policy. In addition, this section also describes the applicable body of international shipping antitrust exemption regimes, and based on the perspective of law and economics, analysis pros and cons of applying shipping anti-monopoly exemption regimes.The second part analyzes the benefits for providing appropriate exemptions for Chinese shipping industry based on the status quo of China’s shipping market. In addition, this section also discusses the practice of shipping antitrust exemption and its legal basis based on the case of P3 Alliance and the combination of COSCO and CSC, and further studies the legislation and its insufficiency of shipping antitrust immunity systems in China.The third part discusses the reform and new developments of international shipping antitrust exemption regimes, this section also launches a comparative study based on three clues of “liner conferences”、“shipping consortium”and“the practice of EU and US exempting the P3 shipping alliance”. In the perspective of comparative law, this section describes the tendency of repealing and strictly restricting the shipping antitrust exemption of liner conferences and the tendency of affording shipping antitrust exemption for shipping consortium with the strict supervision.The final part specifies the necessity to establish and how to establish China’s shipping antitrust exemption regimes based on the third part. Through inspecting the economic development of China’s shipping status quo, we can conclude that With reference to the EU and US reform experience, and regarding to the coordination to the Chinese anti-monopoly law, Chinese shipping legislation should clarify and improve the rules with respect to anti-monopoly exemption. At the same time, in the fields of theory, this part also describes the legislation trend of strictly limiting or abolishing the rules of shipping anti-monopoly exemption for shipping consortium when the shipping economy becomes mature.