European Commission fines Scania for breaking EU antitrust rules

BRUSSELS, 28-Sep-2017 — /EuropaWire/ — The European Commission has found that Scania broke EU antitrust rules. It colluded for 14 years with five other truck manufacturers on truck pricing and on passing on the costs of new technologies to meet stricter emission rules. The Commission has imposed a fine of €880 523 000 on Scania.

In July 2016, the Commission reached a settlement decision concerning the trucks cartel with MAN, DAF, Daimler, Iveco and Volvo/Renault. Scania decided not to settle this cartel case with the Commission, unlike the other five participants in the trucks cartel. As a result, the Commission’s investigation against Scania was carried out under the standard cartel procedure.

Commissioner for Competition, Margrethe Vestager, said: “Today’s decision marks the end of our investigation into a very long lasting cartel – 14 years. This cartel affected very substantial numbers of road hauliers in Europe, since Scania and the other truck manufacturers in the cartel produce more than 9 out of every 10 medium and heavy trucks sold in Europe. These trucks account for around three quarters of inland transport of goods in Europe and play a vital role in the European economy. Instead of colluding on pricing, the truck manufacturers should have been competing against each other – also on environmental improvements.”

Road haulage is an essential part of the European transport sector and its competitiveness depends on truck prices. Today’s decision relates specifically to the market for the manufacturing of medium (weighing between 6 to 16 tons) and heavy trucks (weighing over 16 tons).

The Commission’s investigation revealed that Scania, as a producer of heavy trucks, 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)
• the passing on to customers of the costs for the emissions technologies required to comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI).

The infringement covered the entire EEA and lasted 14 years, from 1997 until 2011, when the Commission carried out unannounced inspections of the firms. Between 1997 and 2004, meetings were held at senior manager level, sometimes at the margins of trade fairs or other events. This was complemented by 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.

Emissions standards compliance

The collusion identified by the Commission concerned the new emission technologies required by the Euro III to Euro VI environmental 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.

The Commission’s investigation did not reveal any links between this cartel and allegations or practices on circumventing the anti-pollution system of certain vehicles (commonly referred to as “defeat devices”).

Today’s decision underlines the importance of a functioning competitive market to foster the development and dissemination of cost-efficient low-emission technologies, which is one of the elements of the upcoming European Strategy for low-emission mobility.

Fines

The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see press release and MEMO).

In setting the level of fines, the Commission took into account Scania’s sales of heavy trucks in the EEA, as well as the serious nature of the infringement, the high combined market share of all participating companies, the geographic scope and the duration of the cartel.

Scania chose not to cooperate with the Commission during the investigation. Consequently Scania does not benefit from a fine reduction according to the Commission’s 2006 Leniency Notice or according to the 2008 Settlement Notice.

Background

The Commission’s investigation started with an immunity application submitted by MAN. In January 2011 the Commission carried out unannounced inspections. In November 2014 the Commission sent a Statement of Objections to the trucks producers. The other addressees of the Statement of Objections were subject to a settlement decision adopted in July 2016. This decision did not cover Scania.

Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement prohibit cartels and other restrictive business practices.

More information will be available on the Commission’s competition website, in the public case register under case number 39824, once confidentiality issues have been resolved.

More information on the Commission’s action against cartels is available on its cartels website, including a list of the ten highest cartel fines per case. New decisions on competition policy are listed in the electronic newsletter Competition weekly e-News.

Action for damages

Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without being reduced on account of the Commission fine.

The Antitrust Damages Directive, which Member States had to implement in their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.

Whistleblower tool

A tool to make it easier for individuals to alert the European Commission about anti-competitive behaviour while maintaining their anonymity has been set up by the Commission. The new tool protects whistleblowers’ anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.

SOURCE: European Commission