Ocean liner shipping class exemption

Summary

The ACCC has issued a discussion paper seeking comments on a possible class exemption for ocean carriers providing international liner cargo shipping services to and from Australia (Liners).

Liners currently have access to a wide suite of exemptions from Australia’s competition law. These exemptions are set out in Part X of the Competition and Consumer Act 2010 (Cth) (the CCA).

However, the 2015 Competition Policy Review (the Harper Review) recommended that Part X be repealed and that the ACCC develop a class exemption for liner shipping agreements that meet a minimum standard of pro-competitive features.

The ACCC is proposing to develop such a class exemption, that would provide legal protection for certain types of coordination among Liners and their customers without them having to apply to the ACCC.

A class exemption is a way for the ACCC to grant businesses an exemption from competition law for certain ‘classes of conduct’ that may otherwise carry a risk of breaching competition laws, but:

  • do not substantially lessen competition, and/or
  • are likely to result in overall public benefits.

Should the Australian Government decide to repeal Part X, coordination among Liners may breach competition laws. A class exemption would provide a ‘safe harbour’ for eligible businesses to coordinate without breaching the competition law. It would operate alongside the ACCC’s existing ‘authorisation’ and ‘notification’ processes, which a business that falls outside the class exemption could still use to seek legal protection on a case-by-case basis.

Next steps

Submissions were due by 28 February 2020.

The ACCC is conscious of the impact COVID-19 is having on Australian consumers and businesses, and has adjusted the focus of its regulatory activities accordingly. Consultation on this class exemption has been temporarily paused.

We anticipate that consultation on the class exemption will recommence later in the year.