Hong Kong Competition Commission grants 5-year block exemption for liner shipping, denies exemption for exchange of information

After an 18-month review process, the Hong Kong Competition Commission issued a Block Exemption Order for Vessel Sharing Agreements between liner shipping companies.

Critically, the Hong Kong Competition Commission declined to exempt Voluntary Discussion Agreements, on the basis that evidence provided in support of the claim of economic efficiencies in Voluntary Discussion Agreements was not sufficient.

The Commission also rejected the shipping industry’s supplementary submission to exempt a narrower subset of Voluntary Discussion Agreements, in which Hong Kong-specific pricing discussions would not have been covered by the exemption, but the sharing of certain other types of information would have been permitted. The regulator considered that such discussions could still contravene the competition rules.

This is the first block exemption granted by the Commission. The decision provides valuable insight into the regulator’s approach towards assessment of effects on competition and the extent of evidence expected from parties claiming economic efficiencies.

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