LONDON (Bloomberg) — European Commission rules banning pricing alliances between shipping companies may trigger a "price war" and mergers among container lines, Clyde & Co. said.Operators such as A.P. Moeller-Maersk A/S, the world's biggest shipping company, and Hapag-Lloyd AG will no longer be allowed to bargain for better prices by pooling their fleets when EC antitrust laws are implemented from 2008.

The ban on these so-called conferences, taking effect as increasing capacity is expected to weaken freight rates, may "provoke price wars" in which smaller operators suffer most, Philippe Ruttley, partner at London-based law firm Clyde & Co. said at a Lloyd's Maritime Academy conference yesterday. The firm represented the Far Eastern Freight Conference, a network of 16 lines including A.P. Moeller, at the EC Court.

"Some of the weaker lines will go to the wall, and you'll be left with the mega carriers," Ruttley said. "By 2030, there may be eight to ten lines maximum. The commission takes a Darwinian view of this."

The prices Copenhagen-based A.P. Moeller and rivals charge customers for transporting containers have declined as the supply of vessels increases. A.P. Moeller bought competitor Royal P&O Nedlloyd NV for $3 billion last year as a five-year boom in rates ended.

A three percent excess in ship availability over demand is enough to spur lines to aggressively undercut each other's prices, Ruttley said.

Fines for violating the antitrust rules can be as high as 1 million euros ($1.32 million), Ruttley said. Companies will be subject to similar or even harsher penalties in the US, where Bergen, Norway-based chemical-tanker owner Odfjell ASA was fined $42.5 million for price-fixing, he said.

There have been no complaints about alliances between oil- tanker operators, known as pools, because these "markets are too diverse for collusive activity," Ruttley said.

Tankers International LLC, based in Limassol, Cyprus, runs a pool of 44 supertankers owned by eight shipowners, including Overseas Shipholding Group and Belgium's Euronav SA.

"The commission is unlikely to take strong action against pools unless there's a complaint or a flagrant breach" of the antitrust directives, Ruttley said.