EU Commission Raids Shipping Companies in Antitrust Investigation
The European Commission has confirmed that Commission officials conducted unannounced inspections on Tuesday, May 17, of the offices of container shipping companies.
The world’s largest container carrier by volume, A.P. Moeller-Maersk A/S headquartered in Denmark, confirmed their offices were raided. CMA-CGM SA of France, the world’s second largest and Hapag-Lloyd AG of Germany also said that Commission officials visited their headquarters unannounced on Tuesday requesting documents.
In a statement the Commission said it “…has reason to believe that the companies concerned may have violated the antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position.”
The Commission did say that such inspections are a “preliminary step” into the investigation of suspected anticompetitive practices and that “such inspections do not mean that the companies are guilty of anti-competitive behavior.”
Maersk, CMA and Hapag said they were fully cooperating with the investigation. Other lines confirming they were raided included Hamburg Sued and Neptune Orient Lines.
The container lines caught the curiosity of antitrust investigators when the global economy was in crisis and shipping rates didn’t fall and shipping lines didn’t seem to suffer.
According to the Wall Street Journal, in January of 2009 the index price for shipping a 40-foot container was $1,603, a year later it was $2,517.
An investigation was finally launched after the European Union and the United States received several complaints from customers of the shipping-industry. Complaints attested that shipping lines were practicing “slow steaming.” Pulling vessels out of commission and lowering shipping speeds in an effort to manipulate the supply and demand in the industry.
The investigation that’s underway is attempting to determine whether or not companies work together in keeping prices high. Hapag said in a statement released today that regulators are checking business practices as far back as October 2008- when the EU did away with the shipping conference agreements that fixed prices for nearly two decades. When the liner conferences were in force, liner would get together to discuss market conditions, rates and any other issues affecting pricing. The EU banned the conferences in October 2008, calling the practice anti-competitive.