Trucks sit parked in the customs zone near the Austrian-German border in Suben, Austria, on Wednesday, March 30, 2016. A permanent return to border controls could lop 470 billion euros of gross domestic product growth from the European economy over the next ten years, based on a relatively conservative assumption of costs, according to research published by Germany's Bertelsmann Foundation. Photographer: Akos Stiller/Bloomberg
Trucks at a customs zone between Austria and Germany © Bloomberg

Europe’s largest truckmakers are facing lawsuits from haulage groups across the continent after admitting to involvement in a 14-year price-fixing cartel as a result of which they were fined a record total of €2.93bn.

Five companies — Iveco, DAF, Volvo/Renault, Daimler and MAN — fixed prices for their vehicles and worked together to delay the introduction of emissions technology, according to Margrethe Vestager, EU competition commissioner.

As a result, on Tuesday, four of them were handed the largest cartel fine in EU history — more than double the previous record — following a five-year investigation that began in 2011.

MAN, as the whistleblower in the case, avoided a penalty that would have been €1.2bn.

“It pays off to denounce a cartel,” noted Mrs Vestager.

Volvo, Iveco and Daimler had their fines reduced by co-operating with the investigation. Following the announcement of the fines, the companies have three months to pay.

Scania, owned by VW Group, faces the same charges but has decided not to settle with the EU and is still being investigated.

Now, the companies face the prospect of expensive lawsuits from their customers, who overpaid for their trucks for more than a decade.

In total, Europe has 600,000 haulage companies, many of them small businesses.

After news of the fines broke, the UK Road Haulage Association said it was “actively considering representing the industry . . . and is making final detailed checks about making representation to the courts”.

“Many of our members will want compensation,” said Richard Burnett, RHA chief executive.

BarentsKrans, a Dutch law firm, also said it was working with Claims Funding Europe, a legal financing group, to “prepare and file proceedings on behalf of businesses from all over Europe who bought trucks in the cartel period from 1997 to 2011”.

Earlier, Ms Vestager had said: “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.”

They formed the cartel in 1997 when “senior managers” from the groups met in a “cosy hotel” in Brussels to discuss working together, according to the EU.

Senior managers then met frequently “at the fringes of trade fairs and other events” until 2004, when the operations of the cartel became more “official”.

“The contacts between competitors became more formalised; they exchanged information over email,” the EU said. Their co-ordination “lasted for a very long time”, only ceasing when EU investigators began a probe in 2011.

They colluded in three areas, the EU found. First, the “gross list” price of the trucks — which is the price when the trucks leave the factory, and the benchmark for negotiations with haulage operators.

Second, they delayed introducing new technology in the vehicles “to comply with the increasingly strict European emissions standards”.

Third, when the trucks did contain the new emissions features, the companies fixed the price premium that was added to the cost of the trucks when selling to customers.

“The fact that truckmakers took part in a cartel rather than competing is actually clear infringement of EU rules,” said Ms Vestager. “This is a very serious offence.”

Because they have admitted guilt, the truck manufacturers could face lawsuits from haulage companies that were forced to overpay for vehicles for years. Many of Europe’s smaller haulage companies will have lost out financially because of the cartel’s actions.

Volvo/Renault face a fine of €670.4m after gaining a 40 per cent reduction for co-operation, and a further 10 per cent for agreeing to settle.

Daimler faces the steepest fine of €1bn, although this has been reduced by 30 per cent for co-operation and 10 per cent for settlement.

Iveco will pay €494.6m, which has been cut 20 per cent for co-operating and settling.

DAF, which is owned by Paccar and did not co-operate with the investigation, faces a €752.7m fine. This also includes a 10 per cent reduction for agreeing to settle.

Before the EU announcement, four of the companies — Iveco, DAF, Volvo and Daimler — had between them set aside €2.85bn to cover the costs of penalties.

Get alerts on Daimler AG when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article