No. of Words: 2915 words
Question: The Liner Conference Block Exemption and the Section 34 Prohibition
Evaluate the reasons for and against maintaining this block exemption for the benefit of this segment of the shipping industry - is the position taken by Singapore justifiable in light of the experiences of other more mature competition law jurisdictions?
The Minister of Trade and Industry, upon the recommendation of the Competition Commission of Singapore [“CCS”], has the power to make a block exemption order [“BEO”] under s. 36 of the Competition Act [“CA”]. Block exemptions refer to a particular category of agreements which are exempt from the s. 34 prohibition. CCS typically recommends BEOs when they satisfy the criteria set out in s. 41 of the CA, which is essentially the same as the net economic benefit exemption under the Third Schedule of the CA. The benefit of a BEO is that it acts as a safe harbor for agreements of the specified category without requiring the parties to take any administrative action e.g. notifying CCS under s. 44 and s. 45.
To date, the Competition (Block Exemption for Liner Shipping Agreements) Order is the only one that has been made in Singapore. It came into operation on 1 January 2006 and will remain in force till 31 December 2015 (after being renewed in 2010).
Block exemptions for liner shipping agreements has historically existed in most jurisdictions with competition law regimes. This essay will discuss firstly, the purported benefits that liner shipping agreements seek to achieve and disadvantages that it avoids, secondly, the deficiencies of liner conference agreements, and its declining importance (in part due to the proliferation of liner consortia agreements and individual service contracts), that has led to the removal of the block exemption for liner conferences in the European Union [“EU”]. However, despite the changes made in the EU, Singapore recently renewed