The EU has charged Europe’s largest truckmakers of fixing prices and delaying the introduction of new emission technologies and the commission is all set to issue the biggest cartel fine in its history by punishing the truckmakers.
The original charge was sheet against DAF, Daimler, Iveco, Scania, MAN and Volvo and Renault in 2014 by Margrethe Vestager, EU competition commissioner. Provisions amounting to $2.6 billion have now been set aside by four of those companies.
Unless there is a reversal by the European Commission, it is expected that the fine would be imposed this year, possibly within weeks, according to people close to the discussions on penalties.
The expected fine dwarfs those imposed over euro and yen interest rate derivative cartels and easily outstrip the EU's previous record of 1.4 billion euros ($1.5 billion) for a television and computer monitor tubes cartel in 2012.
The landmark antitrust showdowns with Google, the US search group, and Gazprom, Russia's gas export monopoly is the only comparable action that Ms Vestager could make with reference to the action against the truckmakers.
According to documents seen by the Financial Times, Ms Vestager probe focuses on the behaviour of the six companies between 1997 and 2011. The several ways in which the manufacturers allegedly colluded on price has been described in the charges. The companies are also accused of agreeing the "timing and price increase levels for the introduction of new emission technologies", a most sensitive issue after the Volkswagen scandal.
Ms Vestager argues that any price collusion among truckmakers would have put up prices of everything from food to furniture and stressed that Europe has 600,000 hauliers — mostly small businesses.
Although one company said it might appeal any negative decision, the companies said they were co-operating with the investigation.
DAF has put aside $945 million; Iveco $500 million, Daimler 600 million euros and Volvo 3.7 billion
Swedish krone ($444 million) in preparation for a big financial hit. MAN, which is owned by Volkswagen Group, would ordinarily escape a fine as it was whistle blower.
"Scania remains unable to estimate the impact the investigation will have," said Scania in its annual report. It is the only company that has not put aside any money.
"It cannot be ruled out that the commission will impose fines on Scania," it added.
The six companies have near total control of the market. the offices of the companies were raided by the commission's inspectors in January 2011.
It does not mean that since the companies have made provision, the commission would not push for a higher sum, cautioned lawyers. Up to 10 per cent of their global turnover could be set as a fine according to the EU rules. That could amount to a maximum of €10.7bn when considering the case of the brands involved.
Two truckmakers had discussed leniency with the commission because the full potential fine could cause serious financial problems a source in the commission was quoted by Cnbc as saying which added that the fines being considered were "extremely high".
For companies found to be part of a cartel, a fine is often only the initial financial penalty.
"We will be waiting with very keen interest to see what the commission says. If we see record damages then there will be consequences for that," said Jack Semple, director of policy at the Road Haulage Association.
(Source:www.cnbc.com)
The original charge was sheet against DAF, Daimler, Iveco, Scania, MAN and Volvo and Renault in 2014 by Margrethe Vestager, EU competition commissioner. Provisions amounting to $2.6 billion have now been set aside by four of those companies.
Unless there is a reversal by the European Commission, it is expected that the fine would be imposed this year, possibly within weeks, according to people close to the discussions on penalties.
The expected fine dwarfs those imposed over euro and yen interest rate derivative cartels and easily outstrip the EU's previous record of 1.4 billion euros ($1.5 billion) for a television and computer monitor tubes cartel in 2012.
The landmark antitrust showdowns with Google, the US search group, and Gazprom, Russia's gas export monopoly is the only comparable action that Ms Vestager could make with reference to the action against the truckmakers.
According to documents seen by the Financial Times, Ms Vestager probe focuses on the behaviour of the six companies between 1997 and 2011. The several ways in which the manufacturers allegedly colluded on price has been described in the charges. The companies are also accused of agreeing the "timing and price increase levels for the introduction of new emission technologies", a most sensitive issue after the Volkswagen scandal.
Ms Vestager argues that any price collusion among truckmakers would have put up prices of everything from food to furniture and stressed that Europe has 600,000 hauliers — mostly small businesses.
Although one company said it might appeal any negative decision, the companies said they were co-operating with the investigation.
DAF has put aside $945 million; Iveco $500 million, Daimler 600 million euros and Volvo 3.7 billion
Swedish krone ($444 million) in preparation for a big financial hit. MAN, which is owned by Volkswagen Group, would ordinarily escape a fine as it was whistle blower.
"Scania remains unable to estimate the impact the investigation will have," said Scania in its annual report. It is the only company that has not put aside any money.
"It cannot be ruled out that the commission will impose fines on Scania," it added.
The six companies have near total control of the market. the offices of the companies were raided by the commission's inspectors in January 2011.
It does not mean that since the companies have made provision, the commission would not push for a higher sum, cautioned lawyers. Up to 10 per cent of their global turnover could be set as a fine according to the EU rules. That could amount to a maximum of €10.7bn when considering the case of the brands involved.
Two truckmakers had discussed leniency with the commission because the full potential fine could cause serious financial problems a source in the commission was quoted by Cnbc as saying which added that the fines being considered were "extremely high".
For companies found to be part of a cartel, a fine is often only the initial financial penalty.
"We will be waiting with very keen interest to see what the commission says. If we see record damages then there will be consequences for that," said Jack Semple, director of policy at the Road Haulage Association.
(Source:www.cnbc.com)