Scania to appeal $1.3 billion cartel fine


Scania to contest European Commission verdict that it was an active member of the manufacturers cartel

Scania to appeal $1.3 billion cartel fine
The Commission has handed out record cartel fines to six manufacturers.

 

Swedish truck maker Scania has responded strongly to the €880 million (A$1.3 billion) fine handed down by the European Commission (EC) overnight.

The European competition commission slapped the huge fine for Scania's alleged participation in a cartel of manufacturers charged with fixing truck prices and delaying emissions technology.

According to the company, it "strongly contests all the findings and allegations made by the European Commission, and will appeal against the decision in its entirety."

"Scania also emphasises that it has co-operated fully with the European Commission by providing it with requested information and explanations throughout the entire investigation period," Scania says in a statement released this morning.

The verdict comes at the end of an investigation by the EC into a cartel of six of the biggest truck manufacturers around the world – Scania, Daimler, DAF, Iveco, MAN and Volvo/Renault – all of which settled with the Commission a year ago except Scania.

Admitting liability, the other manufacturers were fined in July last year with a ten per cent reduction under the EC’s settlement procedure.

For their part in the transgression, the EC fined Daimler just over €1 billion (A$1.5 billion), DAF €753 million (A$1.1 billion), Volvo/Renault €670 million (A$984 million), and Iveco €494 million (A$725 million).

MAN, which blew the whistle, escaped without a fine.

With today’s verdict, the six companies have been fined a total of €3.8 billion (A$5.7 billion), a record for a cartel crime in the European Union’s history.

The severity of the fines reflect the length and power of the cartel, according to the Commission’s verdict statement, which ran for 14 years and was organised by companies that produce more than nine out of every 10 medium and heavy trucks sold on the continent.

The Commission’s statement says:

"Our investigation found that the first meeting between senior managers of all six truck producers took place right here in Brussels, in January 1997. This was the beginning of a collusion that continued for 14 years."

"The cartel dealt with the sales of medium and heavy trucks throughout the European Economic Area.

"The truck producers met regularly to manage the cartel. For the first few years of the cartel, this involved senior managers from the companies' head offices meeting frequently.

"From 2004 onwards the cartel was organised at a lower level by the truck producers' subsidiaries in Germany.

"Scania was an active member of the cartel and was responsible for organising some of the meetings."

The Commission’s verdict says the cartel focused on two distinct areas:

"First, the truck producers discussed the "gross price list" increases they were planning for medium and heavy trucks and coordinated these with each other. 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.

"Second, the truck producers also discussed their response to increasingly strict European emissions standards. These have been progressively tightened over the years, reducing the acceptable limits for exhaust emissions from trucks.

"The truck producers coordinated both on the pricing for the new technologies that were needed to meet the stricter standards and on when to actually introduce new technologies."

The Commission says it is important that truck manufacturers compete on price for consumers but also on environmentally-friendly technology to bring them to market as efficiently as possible.

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