Commission fines truck makers €2.93 billion

The European Commission has found that MAN, Volvo/Renault,
Daimler, Iveco, and DAF colluded for 14 years on truck pricing and on passing
on the costs of compliance with strict emission rules. The Commission has
imposed a record fine of €2,926,499,000 ($A4,296,677,872).

The fine, announced in Brussels yesterday (July 19), doubles
the previous record sanction imposed on a cartel.

MAN was not fined as it revealed the existence of the cartel
to the Commission. All companies acknowledged their involvement and agreed to
settle the case.

Commissioner for competition, Margrethe Vestager (pictured), said:
"We have today put down a marker by imposing record fines for a serious
infringement," she said.

"In all, there are over 30 million trucks on European
roads, which account for around three quarters of inland transport of goods in
Europe and play a vital role for the European economy. It is not acceptable
that MAN, Volvo/Renault, Daimler, Iveco and DAF, which together account for
around nine out of every 10 medium and heavy trucks produced in Europe, were
part of a cartel instead of competing with each other. For 14 years they
colluded on the pricing and on passing on the costs for meeting environmental
standards to customers. This is also a clear message to companies that cartels
are not accepted."

Road haulage is an essential part of the European transport
sector and its competitiveness is contingent on the prices of the vehicles used
by transporters. Today's decision relates specifically to the market for the
manufacturing of medium (weighing between six to 16 tons) and heavy trucks
(weighing over 16 tons). The Commission's investigation revealed that MAN,
Volvo/Renault, Daimler, Iveco and DAF 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.

The Commisison's decision follows the sending of a Statement
of Objections to the truck producers in November 2014. In the context of this
investigation, proceedings were also opened with regard to Scania. Scania is
not covered by this settlement decision and therefore the investigation will
continue under the standard (non-settlement) cartel procedure for this company.

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").

In setting the level of fines, the Commission says it took
into account the respective companies' sales of medium trucks and heavy trucks
in the EEA, as well as the serious nature of the infringement, the high
combined market share of the companies, the geographic scope and the duration
of the cartel.

Under the Commission's 2006 Leniency Notice, MAN received
full immunity for revealing the existence of the cartel, thereby avoiding a
fine of around €1.2 billion. For their cooperation with the investigation,
Volvo/Renault, Daimler and Iveco benefited from reductions of their fines by 10
per cent.

The total fines imposed are as follows:
Volvo/Renault: €670,448,000
Daimler: €1,008,766,000
Iveco: €494,606,000
DAF: €752,679,000