Developments in U.S. Liner Antitrust Immunity Review

Developments in U.S. Liner Antitrust Immunity Review

The Shipping Act of 2010 was really only a starting point, however, which was intended to open the debate, and a variety of factors suggest that liner antitrust immunity will remain a live issue during the 112th Congress. This article was originally published in 8 Benedict's Maritime Bulletin 239, 262 (2010).

Excerpt:

Since the advent of the steamship service in the late 19th century, the international liner industry has been organized into horizontally cooperating "conferences" and shielded from open competition. In the early 1900s, governments expressly exempted the liner industry from the new antitrust legislation, including the Shipping Act of 1916 in the United States, which provided legal sanction for horizontal cooperation, including price fixing and supply control by the conferences. This immunity continued through the 1961 amendments to that act, the comprehensive Shipping Act of 1984, and the Ocean Shipping Reform Act of 1998 ("OSRA").

Periodically, the liner antitrust exemption has come under scrutiny by U.S. lawmakers, and each review appears to have inched closer toward dismantling the immunity. In the United States, the Reagan-era enthusiasm for deregulation ushered in the Shipping Act of 1984, which brought about major changes but continued immunity under the oversight of the Federal Maritime Commission ("FMC") through an arsenal of filing and disclosure requirements backed by an autonomous enforcement authority. OSRA, which was a compromise largely struck between U.S.-flag carriers and the National Industrial Transportation ("NIT") League, is widely credited with further eroding the conference system by establishing the current system of confidential service contracts between shippers and carriers, which now account for approximately 80%-90% of all shipments and which undercut the uniform tariff pricing authority of the conferences.

Most recently, the European Union's decision to repeal liner antitrust immunity effective October 2008, the growing influence of shipper groups, the disappearance of the U.S. liner carriers, and the recent economic downturn have all fueled new calls for another look at liner antitrust immunity in the United States. Despite strong opposition by international carriers, the 111th Congress saw a proposal introduced late in the session to repeal the immunity, and the FMC commenced a fact-finding mission to examine the costs and benefits of retaining the immunity, which will extend the debate into the 112th Congress. [footnotes omitted]

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Bryant Gardner is a partner in Winston & Strawn's Washington, D.C. office who concentrates his practice in admiralty, maritime, and transportation-related government relations, transactions, and litigation.

Mr. Gardner's experience includes regulatory counseling, government contract negotiations and disputes, fleet refinancing, newbuild financing and delivery, Federal Maritime Commission litigation, environmental crimes defense, and matters involving the carriage of hazardous materials. He also has extensive experience representing maritime and other transportation industry clients before Congress, the U.S. Coast Guard, the U.S. Maritime Administration, Department of Transportation, the U.S. Environmental Protection Agency, the U.S. Customs Service, Federal Motor Carrier Safety Administration, Pipeline and Hazardous Materials Safety Administration, and other agencies.

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