European Commission Imposes Juggernaut Fines of Almost €3 Billion on Truck Companies

On 19 July 2016, the European Commission imposed record fines for breaching competition law. 

The fines totalled €2.93 billion smashing all previous records.

The Commission found that MAN, Volvo/Renault, Daimler, Iveco, and DAF had colluded for 14 years on pricing of trucks and passing on the price of collusion with strict emission rules.  These companies represent 90% of the medium (6-16 tons) and heavy (16 tons+) trucks produced in Europe.  The cartel lasted from 1997 to 2011.

The Commission alleged there were three key practices which breached the rules:

  • "coordinating prices at "gross list" level  for medium and heavy trucks in the European Economic Area (EEA). The "gross list" price level relates to the factory price of trucks, as set by each manufacturer. Generally, these gross list prices are the basis for pricing in the trucks industry. The final price paid by buyers is then based on further adjustments, done at national and local level, to these gross list prices.
  • the timing for the introduction of emission technologies for medium and heavy trucks to comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI)
  • the passing on to customers of the costs for the emissions technologies required to comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI)."

Proceedings are still pending against Scania.

Arising out of this case, the key points for business executives are:

  1. Companies can be involved in long-running cartels so it is important for executives and directors to be vigilant and verify that their businesses are not involved in cartels.
  2. A company which makes the decision to approach the competition agencies and seek leniency/immunity spare themselves the fines (they may not spare themselves the civil damages actions but the fines are typically not imposed) – in this case, MAN revealed the existence of the cartel to the European Commission so it saved itself a fine of at least hundreds of millions of euro.
  3. Fines can be enormous: Daimler has been fined €1,008,766,000.
  4. Co-operation by businesses other than the one seeking leniency/immunity with the competition agencies usually does pay off – Volvo/Renault had its fine reduced by 40%, Daimler had its fine reduced by 30% and Iveco was saved 10% by co-operating.
  5. Many of the meetings were at the margins of trade fairs and other events so compliance officers should be very cautious about such events.
  6. Businesses which suffered losses because of these activities might well sue the truck companies now for the higher prices.

For further information please contact Vincent Power or your usual contact in A&L Goodbody.

Date Published: 19 July 2016