Five truckmakers — Daimler, DAF, Iveco, MAN and Volvo-Renault — have agreed to pay EU regulators a record €2.93bn in fines for fixing truck prices over 14 years.
Daimler got the largest penalty of €1.01bn and DAF will pay €752.7m as part of a settlement with the European Commission that cut potential fines by at least 10%.
Volvo and its Renault trucks brand faces a €670.4m fine and Iveco will pay a €494.6m fine.
Fines are high because “this cartel concerns a very large market and continued for a very long time,” EU Competition Commissioner Margrethe Vestager said yesterday. The companies’ actions fixed the prices for around nine out of every ten medium and heavy trucks sold in Europe, she said.
The auto industry is the focus of investigations by competition authorities across the world. The fines exceed an initial €1.7bn penalty for banks after the Libor scandal.
Volkswagen’s Scania unit refused to settle the case and may face a possible fine in the future, the commission said. Scania said in a statement that the company fully co-operated with the EU and can’t comment on what will happen next in the probe.
“The company doesn’t share the Commission’s view on the findings of the investigation,” said Susanna Berlin, investor relations manager at Scania.
Starting in 1997, the companies set the factory price of trucks and co-ordinated the timing and the passing on of costs for new emissions technologies, the EU said. They didn’t avoid or manipulate compliance with pollution standards.
Huge fines for cartels are the Brussels-based Commission’s ultimate weapon to punish companies that cheat by fixing prices. The regulator — which is still probing banks over foreign-exchange manipulation —doled out massive penalties in 2013 for companies accused of rigging benchmark interest rates.
The settlement includes a 10% reduction for promising not to challenge the EU in the courts, on top of other discounts for co-operating with regulators. Truckmakers may still face lawsuits from customers seeking damages for overcharging.
“Daimler regrets these occurrences” and said the fine would be covered by its provision, according to a statement. Paccar, which owns DAF, said its fine is less than it had set aside. Daimler raised provisions for possible related costs by €600m in 2014. Volvo set aside €650m. Paccar has made a provision of €850m for its DAF Trucks unit and CNH Industrial allocated $502m for a possible fine for Iveco.
MAN, like Scania, is owned by Volkswagen In a statement, MAN said it doesn’t tolerate “unfair business practices or illegal conduct”. It avoided a potential €1.2bn fine for being the first company to assist regulators in the probe, the EU said.