Five truck manufacturers fined €2.9bn for involvement in truck cartel

The European Commission (EC) has handed out a record €2.9bn (£2.5bn) fine to five major truck manufacturers after it found they co-ordinated truck pricing and colluded on passing on the costs of compliance with emissions rules between 1997 and 2011.

MAN, Volvo Group (which owns Volvo Trucks and Renault Trucks), Mercedes-Benz parent Daimler, Iveco and Daf were all found to have broken EU competition rules by forming a cartel to discuss the coordination of factory prices for trucks; timings for the introduction of emissions technology; and passing on the cost of such technology to customers.

Scania's involvement is still subject to investigation.

The EC said that between 1997 and 2004 the manufacturers had telephone calls and meetings to pass on information. Between 2004 information was exchanged electronically via a group organised through the manufacturers’ German subsidiaries.

The fine, which totals €2,926,499,000, is the largest fine 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).

After alerting the EC to the cartel, MAN avoided a fine of around €1.2bn, while Daimler, Iveco and Volvo Group all benefited from a reduction of their fines for cooperating with the investigation.

When calculating the fines, the EC said it took into account the manufacturers' 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.

Volvo Group president and CEO Martin Lundstedt said: "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.”

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 emissions technology, they did not aim to avoid or manipulate compliance with emissions standards.

The EC launched the investigation in 2011 when it 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.

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:

Volvo Group - €670,448,000

Daimler - €1,008,766,000

Iveco - €494,606,000

Daf - €752,679,000