Truckmakers fined by Brussels for price collusion

Brussels Sprouts

The European commission has fined Daimler, Volvo/Renault and two other truckmakers a record €2.93bn (£2.5bn) for colluding on prices and passing the costs of emissions rules on to customers.

The cartel, which also comprised MAN, Iveco and DAF, operated between 1997 and 2011 to increase factory prices of medium and heavy trucks in the European Economic Area, the commission said.

They also colluded on when to introduce emissions technologies and charged customers for these measures on trucks weighing 6 tonnes or more.

The manufacturers, which make about 90% of trucks in Europe, did not seek to avoid or rig the standards, but delays meant that customers missed out on innovative technology, the commission said.

Margrethe Vestager, the European commissioner for competition, said: “A meeting in Brussels was the starting point for this long-lasting truck cartel. The first meeting was organised right here in January 1997, in what seems to be a cosy hotel. It was the beginning of a 14-year-long collusion.”

Senior management then colluded at meetings on the fringes of trade fairs and other events, and held discussions by phone. From 2004, the cartel was run by lower level managers through the companies’ German subsidiaries and information was exchanged by email.

MAN, owned by Volkswagen, came forward to reveal the existence of the cartel and avoided a fine of about €1.2bn. The biggest penalty of €1bn was imposed on Daimler. Dutch company DAF’s fine is €753m, Volvo/Renault will pay €670m and Italy’s Iveco will pay €495m.

Vestager declined to say how far up the companies the collusion went, describing those involved simply as senior management. She said MAN’s decision to come forward showed that partners in a cartel could not trust each other.

“It pays off to denounce a cartel and to put an end to your participation and to cooperate with the commission. It’s the best and cheapest thing not to participate in a cartel,” she said.

The fines were more than double the previous record for a cartel and would have been larger if the companies had refused to cooperate. Vestager said the size of the total penalty reflected the large market involved and the long duration of the collusive behaviour.

The highest previous fine for collusion between companies was €1.4bn imposed on a TV and computer monitor tubes cartel in 2012.

Volkswagen-owned Scania, of Sweden, is still under investigation after not taking part in the settlement following the announcement of the commission’s investigation in November 2014.

Rachel Adcox, a partner at US law firm Axinn Veltrop & Harkrider, said: “These are large companies in an industry that generates significant revenues. The striking thing is the period of time over which the cartel is alleged to have taken place.”

Adcox said it was not surprising that cartel members conducted their activities by email given that such communications are traceable. “It’s more common than you would think … Email has become an important tool for investigators because evidence of a cartel from even 10 or 15 years ago can be recovered,” she said.

Vestager said the 30m trucks on European roads make up three-quarters of the inland transport of goods and that it is important for the economy that there is competition between manufacturers.

“We have today put down a marker by imposing record fines for a serious infringement. It is not acceptable that MAN, Volvo/Renault, Daimler, Iveco and DAF 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 customers. This is also a clear message to companies that cartels are not accepted.”

The commission said it found no link between the cartel and the use of defeat devices to manipulate emissions tests. Volkswagen admitted last year that it had used the devices to under-report emissions from its diesel vehicles in tests.

Customers will be able to bring civil claims for damages against the companies in national courts. The commission’s antitrust directive, which must take effect by the end of 2016, is designed to make it easier for victims of anti-competitive behaviour to receive damages.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for The Guardian on Tuesday 19th July 2016 15.49 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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