‘Widespread anger’ as ‘cartel’ truck makers fined €2.9 billion

The Road Haulage Association (RHA) has reported “widespread anger” among hauliers and says it is considering representing the industry in pursuit of compensation, following the European Commission’s (EC) imposition of a record fine of more than €2.9 billion on several of the major truck producers.

An EC investigation, which included unannounced inspections, concluded that MAN, Volvo/Renault, Daimler, Iveco and DAF broke European Union antitrust rules – and that the truck producers had “colluded for 14 years” between 1997 and 2011 “on truck pricing and on passing on the costs of compliance with stricter emission rules”.

Cartels and other restrictive business practices are forbidden under EU and European Economic Area (EEA) treaties and agreements.

“Between 1997 and 2004, meetings were held at senior manager level, sometimes at the margins of trade fairs or other events,” said the Commission.

“This was complemented by phone conversations. From 2004 onwards, the cartel was organised via the truck producers’ German subsidiaries, with participants generally exchanging information electronically.”

Of the aforementioned companies, MAN was not subject to a fine, since it “revealed the existence of the cartel to the Commission,” the EC said.

“All companies acknowledged their involvement and agreed to settle the case,” it added.

The decision follows a Statement of Objections issued to the truck producers in 2014.

“In the context of this investigation, proceedings were also opened with regard to Scania,” said the EC.

“Scania is not covered by this settlement decision, and therefore the investigation will continue under the standard (non-settlement) cartel procedure for this company.”

Commenting on 19 July, the EC’s commissioner for competition, Margrethe Vestager, said: “We have today put down a marker by imposing record fines for a serious infringement. 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.

“It is not acceptable that MAN, Volvo/Renault, Daimler, Iveco and DAF, which together account for around nine out of every ten 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 customers. This is also a clear message to companies that cartels are not accepted.”

The EC decision relates specifically to medium (6-16 tonne) and heavy (16+ tonne) trucks. According to the Commission, the five mentioned firms had engaged in a cartel relating to three key areas.

The first was the coordination of prices at “gross list” level within the EEA (which comprises all EU member states, plus non-member states which are part of the single market, like Norway). This related 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,” said the Commission.

“The final price paid by buyers is then based on further adjustments, done at national and local level, to these gross list prices.”

The second area on which the companies were said to have engaged in a cartel was: “the timing for the introduction of emission technologies for medium and heavy trucks to comply with the increasingly strict European emissions standards (from Euro 3 through to the currently applicable Euro 6)”; and the third was the passing onto customers of the costs for these technologies.

However, the EC emphasised that “the collusion was not aimed at avoiding or manipulating compliance with the new emission standards,” in reference to the emissions scandal that affected some diesel passenger cars and light commercials last year.

For revealing the existence of the cartel, MAN avoided a fine of around €1.2 billion, the EC said. The other companies saw a 10 per cent reduction in their fines in view of their “acknowledgment of their participation in the cartel and of their liability in this respect”.

Meanwhile, Volvo/Renault, Daimler and Iveco had their fines further reduced for “cooperation with the investigation”.

Daimler was fined over €1 billion; DAF more than €752 million; Volvo/Renault over €670 million; and Iveco more than €494 million.

The Road Haulage Association (RHA) said the entire UK haulage industry had been “victim” to the manufacturers’ activities, and that there was “widespread anger among hauliers at the cartel and at the scale of the wrongdoing”.

“The truck manufacturers are our members’ key suppliers and enjoy a partnership which is very often based on trust,” said RHA chief executive Richard Burnett.

“Over the past 20 years the supply of lorries has become more complex with a range of finance deals and maintenance contracts built in by the manufacturers as part of the supply agreement to their customers.

“Hauliers will be angered to learn that at the same time there was a price-fixing cartel linked to the Euro-emission standards.

“It is reassuring to have confirmation that there was no cheating in terms of the Euro-emission testing process but that is of little comfort in terms of the price fixing.

“The victim of this price fixing has been the whole haulage industry and it is already clear today, and in recent weeks that many of our members will want compensation.

“The RHA is therefore actively considering representing the industry in pursuit of this and is making final detailed checks about taking this issue to the courts.”