EU Competition Commissioner Karel Van Miert will announce the decision on Wednesday, after a meeting of senior officials the day before recommends penalties for each member of the 15-strong Trans-Atlantic Conference Agreement (TACA). The fines could be up to 10% of each company's turnover, which in P&O's case would amount to pounds 500m - but pounds 25m is considered the likely maximum.
"The charges are very serious indeed. The fines will be substantial," said a spokesman for the European Commission. He said the fines will relate only to "the behaviour of the companies from 1994 to 1998".
The move will send shock waves through the world's shipping industry, which has long relied on informal arrangements between shipping lines to keep cargo rates stable.
The TACA members are expected to immediately appeal the decision at the European Court of Justice on the grounds the offending arrangements were notified to the Commission under the proper procedures and were therefore exempt from EU competition rules. "Price-fixing is one of the cardinal sins of EU competition rules. Van Miert believes shippers and carriers can cope with competition and don't need to resort to such measures," said a Brussels source.
TACA members claim that price-fixing conferences are an accepted part of the worldwide shipping industry and are even tolerated in Washington.
It is will be the second time P&O has fallen foul of EU competition rules. In 1996, it was one of five ferry companies fined a total of pounds 508,000 by Brussels for illegally levying a surcharge on freight customers in 1992 to offset the effects of a devaluation in sterling.