APL WARNS OECD AGAINST REPEALING ANTITRUST IMMUNITY
APL Ltd. defended the current system of antitrust immunity for ocean carriers, in comments filed with the Organization for Economic Cooperation and Development.
The OECD has issued draft recommendations to remove antitrust immunity for discussion and capacity stabilization agreements and extend approval of rate-setting agreements on an individual basis. The OECD will hold meetings May 25-26 in France to discuss the issue.
While APL said the OECD's discussion paper “contains much accurate and helpful information and analysis,” it presents no facts “to justify making broad changes to a system that currently works.”
APL said that antitrust immunity “has been refined through a number of extensive reviews over an 80-year period,” including the nearly year-old U.S. Ocean Shipping Reform Act.
OSRA “offers a good model of retention of antitrust immunity with appropriate limitations on the activities of rate-setting groups, APL said, including:
* Open membership in agreements.
* Right of independent action on rates.
* Right of agreement members to enter into individual, confidential service contracts directly with shippers.
* Regulatory prohibitions against unreasonable or predatory collective action.
“If carrier antitrust immunity were withdrawn or significantly curtailed, the resulting competition would trigger an intense round of insolvency, takeovers, or other consolidation of incumbent carriers and, as a result, lead to a more concentrated industry,” APL said reduced competition would result in rates going up and service levels going down.