THE Australian Competition and Consumer Commission has begun work on a discussion paper about a ‘class exemption’ for liner shipping, ahead of a widespread stakeholder consultation.

The possible narrow exemption would replace Part X of the Competition and Consumer Act, which permits shipping lines to collaborate on certain matters in the provision of regular services, but which has been under regular attack from competition authorities for many years.

The development was revealed by ACCC chairman Rod Sims during his wide-ranging address to Monday’s Australasian Transport Research Forum.

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Mr Sims described Part X as “a notorious provision of Australia’s competition law” that the recent Harper Review of competition, “ along with many others before it” found to be outdated and unnecessary, and that it should be repealed, with the ACCC to introduce a narrower ‘class exemption’ as a first step.

“Internationally, a lot of other countries had similar broad shipping exemptions, but over the years, more and more have concluded that allowing cartel behaviour by shipping companies comes at considerable cost to the local economy. As a result, several countries have scaled back or entirely removed their equivalent liner shipping exemptions,” Mr Sims said.

“While we are opposed to the broad exemptions given to the liner shipping industry through Part X, we understand the argument that some limited forms of co-ordination may be in the public interest by leaving no doubt that Australia is well served by efficient shipping. We have granted limited exemptions to some airline cooperation on the same logic.”

Mr Sims said the transparent, consultative process would allow all stakeholders to have their say, and would allow the ACCC to assess the public benefits and detriments of different types of cooperation between shipping lines.

“This process will also provide more evidence, and the new class exemption will provide further assurance, for policy makers when they come to decide whether to repeal Part X,” he said.

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