## Facts

- Several liner shipping companies operating in the “Cewal” conference provided services between Northern European ports and ports in Zaire (now the Democratic Republic of Congo).
- The European Commission found Cewal members held a collective dominant position on a substantial part of the common market for that route.
- A principal competitor, an independent carrier consortium, offered alternative services on the same trade route.
- The Commission found Cewal members coordinated “fighting ships”: scheduling vessels to coincide with the competitor’s sailings and fixing freight rates at or below the competitor’s rates, allegedly to exclude the rival.
- The Commission also found loyalty-inducing measures (including rebate schemes) that tied customers to conference carriers and impeded rival access.
- The Commission further found Cewal pressed for application of an exclusivity arrangement with Zairian transport authorities that directed public-sector cargo to conference vessels, harming non-conference carriers.
- The Commission adopted a decision finding abuses of dominance and imposed substantial fines on conference members, including the applicants.
- The applicants brought annulment actions challenging the infringement findings and fines; the matters were joined before the Court of First Instance.

## Issues

1. Whether multiple undertakings in a liner conference could be treated as holding a collective dominant position under Article 86 EC.
2. Whether “fighting ships,” loyalty-inducing rebates/conditions, and reliance on an exclusivity arrangement constituted abuses of collective dominance.
3. Whether the liner conference regime and possible Article 85(3) / Regulation 4056/86 coverage insulated the conduct from Article 86 scrutiny.
4. Whether the Commission’s procedure and the fines imposed were lawful and properly reasoned.

## Decision

- The Court of First Instance largely upheld the Commission’s decision.
- The court held the Commission adequately established a collective dominant position for the conference members on the relevant market.
- The court affirmed that coordinated fighting ships and targeted rate-cutting intended to weaken a competitor could constitute abusive conduct.
- The court upheld findings that loyalty-inducing rebates/conditions were abusive where they tied customers and hindered competitors.
- The court upheld findings that insisting on application of the exclusivity arrangement with Zairian authorities was abusive because it reinforced foreclosure against rivals.
- The court accepted that Article 86 could apply even where conduct might fall within Article 85 and sector-specific exemptions, because exemption from the agreement prohibition does not authorize abuse of dominance.
- The court rejected most procedural complaints and substantially confirmed the fines, subject to limited adjustments.

## Legal Principles

- Collective dominance may be found where undertakings are linked such that they present themselves on the market as a collective entity capable of common action toward customers and competitors.
- Exclusionary conduct by a dominant undertaking (or collectively dominant group) may be abusive where it is directed at weakening or excluding a competitor and is not competition on the merits.
- Loyalty rebates or fidelity-inducing measures by a dominant undertaking may be abusive when they tie customers and impede competitor access or expansion.
- Using contractual or regulatory arrangements to foreclose rivals may constitute abuse when it strengthens dominant market power and restricts competitive entry.
- Articles 85 and 86 EC can apply to the same factual setting; an exemption under Article 85(3) or sectoral block exemption does not preclude application of Article 86 to abusive exercises of dominance.
- In reviewing fines and procedure, the court assesses whether the undertaking had adequate notice and opportunity to respond and whether the Commission’s assessment of gravity, duration, and participation supports the penalty.

## Conclusion

The Court of First Instance upheld the Commission’s determination that Cewal conference members held a collective dominant position and abused it through targeted exclusionary strategies (including fighting ships, loyalty measures, and enforced exclusivity), and it held that sectoral and Article 85(3) exemptions did not shield abusive conduct from Article 86 enforcement.


Compagnie Mar. Belge Transps. SA v. Comm’n, Joined Cases T-24/93, T-25/93, T-26/93 & T-28/93, 1996 E.C.R. II-1201 (C.F.I. 1996)