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Mofcom prohibits P3 Alliance
On 17 June 2014 the Chinese competition authority, Mofcom, published its decision to prohibit the container shipping carriers alliance between Maersk Line, MSC Mediterranean Shipping and CMA CGM (‘P3’). It is important to note that Mofcom’s decision is not subject to any judicial review. The alliance would have involved a long term vessel sharing agreement for a minimum of ten years to create a joint fleet of 255 ships, with the aim of providing a more efficient service. According to Mofcom the agreement would result in a de facto merger and seriously affect Chinese domestic market by weakening the bargaining position of Chinese exporters and reducing the competitive strength of Chinese ports which would probably be forced to reduce their service charges; the size of the shipping companies involved also probably played a role in the decision. Mofcom’s decision came as a surprise, in view of the fact that the alliance had already received approval (although qualified) by the EU and US competition authorities. The decision has also caused concern in the industry about the lack of certainty arising from differing national competition rules.
[In cooperation with Helen Elmer, trainee, London]
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