EC fines truck manufacturers a record €2.9bn after 14-year price fixing cartel

European truck manufacturers have been hit with a record €2.9bn (£2.5bn) fine after they colluded for 14 years on truck pricing and on passing on the costs of compliance with emissions rules.

The European Commission (EC) found that MAN, Volvo Group (parent company to Volvo Trucks and Renault Trucks), Mercedes-Benz parent Daimler, Iveco and Daf broke EU antitrust rules by forming a cartel to discuss the coordination of factory prices for trucks; timings for the introduction of emissions technology to comply with European emission standards such as Euro-6; and passing on the cost of such technology to customers.

An investigation into Scania’s involvement continues.

The fine, which totals €2,926,499,000, is the largest the EC has imposed following a competition investigation to date, the previous being a €1.4bn fine for a TV and computer monitor tubes cartel in 2012.

The EC’s investigation related specifically to the medium and heavy truck industries across the European Economic Area (EEA).

The EC said that between 1997 and 2004 the manufacturers held meetings at trade fairs or other industry events, complemented by phone conversations, to pass on information.

From 2004 until 2011 information exchanged electronically via a group organised through the firms’ German subsidiaries.

MAN avoids a fine

MAN avoided a fine of around €1.2bn for alerting the EC to the cartel in 2011, while Daimler, Iveco and Volvo Group all benefited from a reduction in their penalties for cooperating with the investigation. Daimler received the largest individual fine of €1bn.

The EC said the level of fines imposed took into account their respective truck sales in the EEA, the seriousness of the infringement, the high combined market share of the companies and the duration and geographic scope of the cartel.

In its decision issued today (19 July), the EC said the firms coordinated prices at “gross list” level, which relates to the factory price of trucks and is generally used as the basis for pricing in the HGV industry.

The EC emphasized that while the manufacturers colluded on timing and passing on the cost of technology to comply with emissions standards, they did not aim to avoid or manipulate compliance with the standards.

Not acceptable

Competition commissioner Margrethe Vestager said : “It is not acceptable that MAN, Volvo/Renault, Daimler, Iveco and Daf, which together account for around nine 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.”

The investigation began in 2011 when the EC carried out unannounced inspections of the truck manufacturers’ premises.

The manufacturers received a statement of objections from the EC in 2014- a formal notice informing them that they were believed to have engaged in anti-competitive behaviour.

Volvo Group made a €650m provision ahead of the conclusion of the EC's investigation, while Daf parent Paccar set aside $854.9m (£649.5m) and Iveco parent CNH Industrial allocated $502m.

Volvo President and CEO Martin Lundstedt said: “The commission case was already more than five years under way. 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.

“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,” Lundstedt added.

An EC spokeswoman said the five truck producers now had three months to pay the fine. The money will go into the EU budget and reduce the contributions due from EU countries for membership in the EU, she added.

Total fines imposed:

Daimler - €1,008,766,000

Daf - €752,679,000

Volvo Group - €670,448,000

Iveco - €494,606,000