Collusion Fines for Truck Makers

Massive collusion fines for truck makers have been handed down by the European Union. According to the EU the group of manufacturers were found to be acting as a cartel to fix prices of trucks and time the introduction of technologies to comply with emissions rules.

The fines amount to 3 billion euros ($4.4 billion) and are said to be the highest ever levied by the European authorities. All of the major suppliers to the European market were included in the decision. Those fined in the case so far include MAN, Mercedes Benz, DAF, Iveco and Volvo/Renault and it was asserted they had been colluding for 14 years, from 1997 to 2011. Scania is still under investigation.

“We have today put down a marker by imposing record fines for a serious infringement,” said Margrethe Vestager, European Commissioner for Competition. “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 9 out of every 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 customers. This is also a clear message to companies that cartels are not accepted.”

MAN were the company who broke ranks and went to the EU in 2011 and informed it of the cartel’s activities. As a result, MAN got full immunity from fines. Volvo/Renault, Mercedes Benz and Iveco cooperated with the investigation resulting in reduced fines for them.

Mercedes Benz was fined the most at $1.5 billion and, like the others involved, now has three months to pay the fine. DAF’s fine totalled $1.1 billion, Volvo has to pay $990 million and Iveco $730 million.

The basis of the case revolved around an agreement between the truck builders to introduce emission control technologies like SCR at the same time, and at the same price, to protect profit levels on truck sales.

“The Commission case was already more than five years under way,” said Martin Lundstedt, Volvo President and CEO, after the judgement. “Without the settlement we would have been facing many more years of proceedings, with an uncertain outcome. We are now able to look forward and focus on our business. We strive to be a world leading business because we compete with the best products and services and the best employees.

“While we regret what has happened, we are convinced that these events have not impacted our customers. The Volvo Group has always competed for every single transaction. We have taken these events very seriously from the outset and our full cooperation with the Commission resulted in a very substantial reduction in the fine.”

Now the fines are being levied, the truck manufacturers involved may be open to legal action from customers who bought trucks during the period covered by the decision. As yet it is unclear exactly what the legal position will be in the various jurisdictions, but it is known Daimler set aside $590 million last week for unspecified legal costs.