wednesday, 27 september of 2017

EU fines VW’s Scania €880m over truck cartel claims

Brussels fined Scania €880m, saying it had participated in a 14-year long cartel to fix prices and pass on the costs of new emissions-reducing technology.

Five other truck companies settled in July last year for a record €2.9bn cartel fine, but Scania, which is owned by VW, denies any wrongdoing and says it will appeal the EU’s decision.

The EU alleges that the companies colluded from January 1997 through January 2011 to coordinate prices and timing of the new emission-reducing technology of medium and heavy trucks.

Margrethe Vestager, European competition commissioner said:

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.
A Scania spokesman said the company plans to appeal on two grounds.

“Scania has not on any level or in any context entered into an agreement with other manufacturers with regard to pricing [and] Scania has also not delayed the introduction of new engines compliant with EU legislation for exhaust emissions.”

The cartel decision has opened the manufacturers who settled to damages claims from trucks buyers around Europe. There are 600,000 haulers around the continent, most of which are small businesses.

The UK’s Road Haulage Association, which represents lorry drivers, is seeking £3.9bn in compensation from all six truck companies in a case before the UK’s Competition Appeal Tribunal. The RHA is seeking £6,000 compensation for each of the nearly 650,000 lorries sold in the UK between 1997 and 2011.

European officials raided the truck companies’ offices in 2011 and sent a charge sheet to the parties in November 2014. Senior managers at the truck companies allegedly exchanged information in person or over the phone during the first eight years of the cartel. After 2004 the group communicated electronically via their German subsidiaries, the EU claims.

EU rules allow Brussels to levy a fine of up to 10 per cent of global turnover. By choosing not to settle, Scania missed out on a reduction in its potential fine.

The five other cartel members’ charges were reduced based on when they applied for leniency and their level of cooperation with officials during the settlement process. As the whistleblower in the case VW-owned MAN avoided its entire €1.2bn penalty.

Fines to the other members of the group were reduced between 50 to 10 per cent: Volvo/Renault paid €676m, Daimler was fined €1bn, Iveco’s levy was €465m and DAF’s bill was €753m.

(Published by Financial Times - September 27, 2017)

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