Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC fines truck producers €2.93B for cartel participation, (Jul 19, 2016)

By Michael Menzhuber, J.D., LL.M.

The European Commission (EC) has imposed a record fine of €2,926,499,000 on DAF Trucks NV, Daimler Trucks, Iveco S.p.A, and Volvo/Renault for participating in a cartel concerning medium and heavy trucks, the agency announced today.

The EC had found that DAF, Daimler, Iveco, MAN Trucks U.K., and Volvo/Renault (collectively, "truck producers") had colluded for 14 years on truck pricing and passing on the costs of compliance with stricter emission rules. Under the EC’s 2006 Leniency Notice, MAN received full immunity for revealing the existence of the cartel, thereby avoiding a fine of nearly €1.2 billion.

The truck producers account for approximately nine out of every ten medium (weighing between 6 and 16 tons) and heavy trucks (weighing over 16 tons) sold in Europe, according to the EC. The EC’s investigation revealed that, from 1997 to 2011, the truck producers engaged in a cartel relating to:

• coordinating prices at "gross list" level for medium and heavy trucks in the European Economic Area (EEA);

• the timing for the introduction of emission technologies for medium and heavy trucks to comply with the increasingly strict European emissions standards; and

• the passing on to customers of the costs for emission technologies.

The collusion was not aimed at avoiding or manipulating compliance with the new emission standards. Also, the EC’s investigation did not reveal any links between this cartel and allegations or practices on circumventing the anti-pollution system of certain vehicles (defeat devices).

The fines were set on the basis of the EC’s 2006 Guidelines on fines. In setting the level of the fines, the EC took into account: (1) the respective companies’ sales of medium trucks and heavy trucks in the EEA; (2) the serious nature of the infringement; (3) the high combined market share of the companies; (4) the geographic scope of the cartel; and (5) the duration of the cartel.

Daimler, Iveco, and Volvo/Renault benefited from reductions of their fines under the 2006 Leniency Notice for their cooperation with the investigation. The trucker producers were fined as follows: DAF (€752,679,000); Daimler (€1,008,766,000); Iveco (€494,606,000); and Volvo/Renault (€670,448,000).

The EC’s decision follows the sending of a Statement of Objections to the truck producers in November of 2014. In the contexts of this investigation, proceedings were also opened with regard to Scania. However, Scania is not covered by this settlement decision and, therefore, the investigation into Scania will continue under the standard (non-settlement) cartel procedure.

"Our objective is to ensure that there is competition, innovation and better use of [resources] to the benefit of consumers," stated EC Commissioner Margrethe Vestager. "Today’s decision is important for safeguarding real competition in the trucks sector in Europe. The fact that these truck makers took part in a cartel rather than fully competing with each other is a clear infringement of EU competition rules."

Companies: DAF Trucks NV; Daimler Trucks; Iveco S.p.A.; MAN Trucks U.K.; Volvo/Renault

News: Antitrust