Construction News

Tue March 19 2024

Related Information

Truck makers fined £2.5bn for emissions cartel

20 Jul 16 Four leading truck makers have been fined €2.93bn (£2.5bn) for collusion and ripping off their customers.

The European Commission found that MAN, Volvo/Renault, Daimler, Iveco, and DAF broke EU antitrust rules. MAN was excused the fine because it blew the whistle on the long-running saga of anti-competitive practices.

Scania is also under investigation but it has not agreed to settle.

The truck makers colluded for 14 years, from 1997 until 2011, on truck pricing and on passing on the costs of compliance with stricter emission rules.

All companies admitted their guilt and agreed to settle the case.

The decision relates specifically to the market for medium (6 to 16 tonnes) and heavy trucks (over 16 tonnes). The investigation revealed that MAN, Volvo/Renault, Daimler, Iveco and DAF had engaged in a cartel relating to:

  • 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)
  • passing on to customers costs for emissions technologies required to comply with the increasingly strict European emissions standards.

The manufacturers met up at senior manager level, sometimes at the margins of trade fairs or other events. Meetings were followed up with phone conversations. From 2004 onwards, the cartel was organised via the truck producers' German subsidiaries, with participants generally exchanging information electronically. Over the 14 years the discussions between the companies covered the same topics, namely the respective ‘gross list’ price increases, timing for the introduction of new emissions technologies and the passing on to customers of the costs for the emissions technologies.

Related Information

The collusion identified by the commission concerned the new emission technologies required by the Euro III to Euro VI standards, specifically coordination on timing and coordination on passing on of costs of emission technologies for trucks compliant with newly introduced emissions standards. The collusion was not aimed at avoiding or manipulating compliance with the new emission standards.

No links were found between this cartel and any circumvention of the standards with the kind of  ‘defeat devices’ that Volkswagen has been found to have used on its diesel cars.

MAN received full immunity for revealing the existence of the cartel, thereby avoiding a fine of around €1.2 billion.

The others were all given a 10% discount in their fines for admitting to the collusion. Varying levels of further discount were made according to how much each company helped with the investigation.

Daimler was fined €1bn; DAF €753m; Volvo/Renault €670m; and Iveco €495m.

EU 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 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."

Got a story? Email news@theconstructionindex.co.uk

MPU
MPU

Click here to view latest construction news »