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Microsoft And Maersk Tangle With  European Union Commission

Microsoft And Maersk Tangle With European Union Commission

Bloomberg
Total Views: 8
June 1, 2015

[contextly_sidebar id=”WPGEdQNxFgp3DPoc9tMFIn9H4nOeG8SM”]by Gaspard Sebag and Stephanie Bodoni (Bloomberg) The 561 million-euro ($612 million) antitrust fine Microsoft Corp. paid for breaking a promise is preying on the minds of shipping lines, including A.P. Moeller-Maersk A/S, in settlement talks with the European Union.

The EU has drafted a possible deal with Maersk Line, MSC Mediterranean Shipping Co., CMA CGM SA and 10 rivals, that would allow them to avoid initial fines in a case over possible collusion on prices, said three people familiar with the case. But some of the firms want safeguards to prevent minor breaches of the settlement from triggering hefty penalties of the sort faced by Microsoft, said the people, who asked not to be named because the negotiations are private.

The European Commission targeted shipping lines in a 2013 probe over suspicions that announcements of their general rate increases enabled companies to coordinate prices. Under the draft settlement, lines would avoid any initial penalties by agreeing to stop making the public statements weeks in advance, the people said. 

While entering into such pledges with EU regulators can enable companies to shake off antitrust probes and avoid fines, penalties for non-compliance are severe. Microsoft dodged fines by promising regulators to give users a choice of web browsers in 2009. The respite in the software company’s battle with the EU was only temporary. In 2013, it was ordered to pay more than half a billion euros when it breached the terms of the settlement by failing to offer the browser choice in an update for some 28 million computers.

The Microsoft case has made some of the shipping lines wary of signing up to the accord without assurances from regulators, the people said. The companies want the terms of any accord to be easy for sales staff to understand and implement, reducing the risk of violations, the people said.

Four Weeks

The terms of the draft settlement would alter the way prices are announced. Rather than communicating on price increases, the container lines would agree to only make statements on the actual prices less than four weeks in advance of them taking effect, the people said.

Any draft settlement would be subject to industry appraisal before being made binding, a process that can last for months.

“Maersk Line continues to be at the EU commission’s disposal,” Michael Christian Storgaard, a company spokesman, said in an e-mail. He declined to comment further until the investigation has been concluded.

Representatives for MSC, CMA CGM and Hapag-Lloyd AG didn’t immediately respond to requests for comment. Ricardo Cardoso, a spokesman at the commission, declined to comment on the probe.

Only Hapag-Lloyd has so far shown reluctance to discuss an agreement with the European Commission, the people said.

The Hamburg, Germany-based company may face a formal competition complaint if it doesn’t sign up to a deal, said another person with knowledge of the probe. So-called statements of objections are usually precursors to fines.

 

©2015 Bloomberg News

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