Four truck builders were fined almost 3 billion euros ($3.24 billion) after the European Commission determined the companies colluded to fix prices for 14 years and pass on the costs of compliance with emission rules.
Volvo, Daimler, Iveco and Paccar’s DAF were fined a record 2.93 billion euros. MAN was named in the case but wasn’t fined because it revealed the existence of what the commission calls a “cartel” in a report on Tuesday. The other companies admitted their participation and agreed to settle the case.
“We have today put down a marker by imposing record fines for a serious infringement,” said Margrethe Vestager, the commissioner for competition. “This is also a clear message to companies that cartels are not accepted.”
The anti-trust investigation started in 1997 and ended in 2011 and involved price collusion on medium and large trucks, the European Commission said.
The companies in the so-called cartel were accused of coordinating prices at the “gross list” level for medium and heavy trucks in the European Economic Area. Gross-list prices are set at the factory.
“Generally, these gross list prices are the basis for pricing in the trucks industry,” the commission said. “The final price paid by buyers is then based on further adjustments, done at national and local level, to these gross list prices.”
The truck manufacturers also were accused of forcing customers to pay the costs for emissions technologies required to comply with “increasingly strict European emissions standards,” the commission said. Truck-maker Scania is still under investigation and was not named in today’s settlement.
Daimler was the hardest hit, incurring fines totaling 1 billion euros, while Paccar’s DAF was fined 752.7 million euros and Iveco was charged 494.6 million euros. Fines took into account sales, the seriousness of the infringement, market share and geographic scope and duration, the commission said.
Paccar said in a regulatory filing on Tuesday that it had recorded a charge of 850 million euros in the first quarter in anticipation of the fine. Since the fine was actually less than anticipated, Paccar will reverse 97.3 million euros in charges in its second-quarter earnings report.
The Bellevue, Wash., company said it will pay the fine within three months, and that it has “sufficient liquidity” to fund the payment.
Volvo Group, which was fined 670.4 million euros, said it welcomed the settlement and fines because the case would’ve dragged on for many years.
Martin Lundstedt, Volvo’s chief executive, denied that the collusion had any effect on customers and that it “competed for every” sale it made.
“Without the settlement we would have been facing many more years of proceedings, with an uncertain outcome,” Lundstedt said in a statement. “We are now able to look forward and focus on our business.”
The European Commission said the fines will hopefully drive home the weight of anti-trust rules and their significance with regards to emission regulations.
“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,” the commission said.