Out-Law News 3 min. read
21 Jul 2016, 2:54 pm
MAN, Volvo/Renault, Daimler, Iveco and DAF broke EU antitrust rules by colluding on truck pricing and passing on the costs of compliance with stricter emissions rules to their customers for 14 years, according to the Commission. All of the companies acknowledged their involvement and agreed to settle the case, but MAN was not fined as it was the 'whistleblower' which brought the cartel to the attention of the Commission.
Another manufacturer, Scania, is currently being investigated by the Commission in relation to the same cartel. Scania declined to participate in the settlement talks and so the Commission's investigation is continuing, according to its announcement.
Competition commissioner Margrethe Vestager said that by imposing record fines the Commission had "put down a marker" against serious competition law infringements.
"In all, there are over 30 million trucks on European roads, which account for around three quarters of inland transport of goods in Europe and play a vital role for the European economy," she said.
"It is not acceptable that MAN, Volvo/Renault, Daimler, Iveco and DAF, which together account for around nine out of 10 medium and heavy trucks produced in Europe, were part of a cartel instead of competing with each other. For 14 years they colluded on the pricing and on passing on the costs for meeting environmental standards to consumers. This is also a clear message to companies that cartels are not accepted," she said.
"The ramifications of this decision in terms of private damages actions are huge," said competition law expert Ben Lasserson of Pinsent Masons, the law firm behind Out-Law.com. "Businesses operating across a number of different sectors will have been impacted, and the 14 year duration of the cartel coupled with the high costs of trucks mean that the scale of recoveries are likely to be very significant indeed."
The companies covered by the settlement decision all manufacture medium trucks, weighing between six and 16 tonnes, and heavy trucks, which weigh over 16 tonnes, according to the Commission. Their anticompetitive behaviour covered the whole of the European Economic Area (EEA) and ran between 1997 and 2011, when the Commission carried out unannounced inspections of the companies involved, it said.
The cartel initially stemmed from meetings between unnamed "senior managers" of the companies, who then met frequently, "sometimes at the margins of trade fairs or other events", according to the Commission. From 2004 onwards, it was operated at a "lower level" within the companies' German subsidiaries, and managed over email, the Commission said.
The companies admitted to collusion over the factory pricing of their trucks, known as 'gross list' prices, as well as the timing of the introduction of the new emissions limiting technologies required by tougher EU environmental standards into their products. The companies also agreed to pass on the costs of these technologies onto their consumers. There were no links between these acts and the use of 'defeat devices' by some companies to circumvent vehicles' anti-pollution systems, which has been the subject of separate action by international authorities, according to the Commission.
MAN received full immunity from the Commission for revealing the existence of the cartel, and so avoided a fine of around €1.2bn, the Commission said. The other companies received various fine reductions reflecting the extent of their cooperation with the Commission's investigations, as well as an additional 10% reduction to reflect the fact that they settled the case.
"The settlement procedure is designed to save time and resources to the Commission and the parties investigated by getting a quicker, shorter, decision and avoiding lengthy appeals," said competition law expert Caroline Janssens of Pinsent Masons. "In this case though, settlement talks only started after a full statement of objections was issued against the parties. This had been unseen before and certainly shows the Commission’s flexibility with the procedure."
"It is of course too early to say whether this is a new path that the Commission is likely to take more often in future cartel cases. But parties under investigation should be very careful when deciding to 'wait and see' how the procedure goes before deciding to enter into settlement talks. Not only there is no obligation on the Commission to accept settlement discussions, but companies then face the real risk of a full statement of objections potentially being made readily available to claimants seeking damages for the loss suffered as a result of the cartel," she said.