The Second, exchanges between addressees were held.

The demand
in the truck market is highly cyclical (it depends highly on the economic
cycle). While passenger cars are acquired by both private and commercial
customers, trucks are acquired solely by commercial customers.

Due to the durability
of trucks investing mostly in times of business thrive is facilitated.
Additionlly, trucks are not a good to merchandize.

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Because of
rather few customers of the truck producers and long period of trade, the
trucks are specialized on customer’s requirements which is also impeding new
producers to become attractive. The mentioned addressees are benefitted in this
market because they have gained reliability for technical performance, fuel
consumption and maintenance cost. Branding therefore plays an important role in
customer’s decisions.

 

 

**Price
setting mechanisms and gross price list

The gross
price of a product refers to the prices paid by operators in national markets.
It doesn’t include taxation or any cash discounting and varies from the final
net customer price. The gross price list is set by the headquarters of firms.
All addressees except Iveco applied a gross price list with harmonized gross
list prices across the EEA (started 2000).

 

 

 

 

MARKET TRANSPARENCY

The truck
market is characterized by a strikingly high degree of transparency which
especially helps the producers to adjust their supply and therewith increase
revenue.

First, our
addressees had access to competitively important data such as truck
registrations through public registries. Second, exchanges between addressees were
held. Additionally, truck producers and their distributors held regular
exchanges within industry associations where data on order intake and delivery
periods or stock levels was exchanged.

In the
truck market, it is also possible to gain extra data through customers. They
may negotiate prices on basis of competitor’s offers and prices and therefore
contribute to inform the addressee.

Last but
not least, mystery shopping is frequently used. In this case, company internals
disguised as regular customers are seeking to receive information about their competitor’s
offers as well as future market behavior (changes in respective gross price
lists).

All of
these factors facilitate manipulation of the free market and build a great
basis for our addressees to form a very profitable cartel.

 

 

EU INVESTIGATION

 

In
September 2010, MAN revealed the long lasting cartel and applied for immunity,
making use of the European Commission’s leniency policy. This offers companies
involved in a cartel – which self-report and hand over evidence – either total
immunity from fines or a reduction of fines which the Commission would have
otherwise imposed on them. It can also benefit the commission because they
obtain insider evidence of the cartel.

In December
2010 the Commission replied to MAN’s request and since MAN was the first to
inform the Commission about the undetected cartel, granted total immunity.

Pursuant, the
Commission had inspections at the involved companie’s premises during January
2011. These inspections caused Volvo, Daimler and Iveco to apply for immunity
from fines (or reductions) one after the other between the end of January and the
beginning of Feburary.
Following the investigation, the Commission sent requests for information under
Article 18 of Regulation (EC) No 1/2003 as well as under Point 12 of the
Leniency Notice to the addressees.

On 20
November 2014, the Commission initiated proceedings pursuant to Article 11(6)
of Regulation (EC) No 1/2003 against DAF, Daimler, Iveco, MAN and Volvo 1,
and adopted a Statement of Objections, which it notified to these entities

Subsequent
to the adoption and notification of the Statement of Objections, the Addressees
had access to the complete file of the Commission.

All of the
Addressees approached the Commission informally and asked to continue the case
under the settlement procedure. Settlement meetings between the Commission and
each addressee took place where the Commission informed about estimation of the
range of fines likely to be imposed. The addressees considered that there was a
sufficient common understanding as regards the potential objections and the
estimation of the range of likely fines so they requested to settlement
submissions. Formal requests to settle pursuant to Article 10a (2) of
Regulation (EC) No 773/2004 (the “settlement submissions”) were sent. Each of
the Addressees made the above-mentioned submission conditional upon the
imposition of a fine by the Commission which will not exceed the amount as
specified in its settlement submission.

On 19 July
2016, Volvo, Daimler and Iveco were then fined (with reductions due to their
leniency applications) and on 27 November 2017 finally Scania was also fined
but without any reductions.

 

 

FINES

In
preparation for a big financial hit, almost all of the addressees had put aside
money. DAF put aside $945m; Iveco $500m, Daimler $672m and Volvo $444m euro. By
alerting the Commission, MAN, which is owned by Volkswagen Group, escaped a
$1.2bn fine. Only Scania, which is also owned by Volkswagen, has not put aside
any money. “Scania remains unable to estimate the impact the investigation will
have,” the company said in its annual report. “It cannot be ruled out that the
commission will impose fines on Scania,” it added.

Margrethe
Vestager, EU competition commissioner, issued the original charge sheet against
DAF, Daimler, Iveco, Scania, MAN and Volvo/Renault in 2014. Ms Vestager has
stressed that Europe has 600,000 hauliers — mostly small businesses — and
argues that any price collusion among truckmakers would have put up prices of
everything from food to furniture.

On 19 July
2016, MAN, Volvo/Renault, Daimler, Iveco and DAF were fined a total of 2,926bn
Euro.

Eventually,
on 27 November 2017 Scania was fined another 880m Euro. If they had agreed on a
settlement with the Commission, they could have saved 10% of this.

With a
total of 3.8bn Euro this is the European Union`s biggest cartel fine so far.

 

This may
seem to be a significantly high fine but under EU rules, the companies may face
a fine of up to 10 per cent of their global turnover. So in this case, that
could amount to a maximum of €10.7bn.

Despite
these fines, there can be other consequences the involved firms have to face. Some
hauliers were considering whether to pursue follow-up damages because any
operator who leased or bought trucks since 1997 might have paid too much. To
achieve compensation, they can cooperate with the Road Haulage association.

“We will be
waiting with very keen interest to see what the commission says,” said Jack
Semple, director of policy at the Road Haulage Association. “If we see record
damages then there will be consequences for that.”

The
association stated a possible refund of 6000 pound for a new leased or
purchased truck.

How many
hauliers were able to regain a compensation payment is not evidenced. Many
claims are also still in process.