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However, the 2015 Competition Policy Review (the Harper Review) recommended that Part X be repealed and that the ACCC develop a class exemption for liner shipping agreements that meet a minimum standard of pro-competitive features.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

The ACCC invites submissions in response to the discussion paper by 28 February 2020.

Initial public consultation