Tuesday, April 11, 2017

UK Road Haulage Group's Class Action Against European Truck Makers Cartel Strengthened

Release of EC Non-Confidential Decision Shows Depth of Corruption
Shipping News Feature
UK – EUROPE – The ongoing case of the European truck cartel which has seen many of the manufacturers collude and conspire with regard to vehicle prices and emissions has reached a new phase with the release this week of the European Commission (EC) settlement decision on the matter. This has fanned the flames for those who propose a class action, of the type we have seen so often across the Atlantic, to reimburse those road haulage operators left out of pocket.

In the van (no pun intended) on this is the Road Haulage Association (RHA) which, having obtained the non-confidential version of the EC ruling, says it serves to strongly reinforce the RHA’s determination to pursue the legal action against the manufacturers to reclaim the cost of overpayment for its members. The organisation is appealing for transport firms, whether they are RHA members or not, to get in touch if they want compensation. It also confirms there is no cost to haulage firms in joining the proposed legal action and anyone affected can register their interest here.

The companies charged with antitrust activity reads like a who’s who of truck production with Volvo, DAF, Daimler, Fiat, Iveco, MAN and Renault just some of the names linked to the investigation. As several of the manufacturers (MAN, Daimler, Iveco, Volvo/Renault, and DAF) settled with the EC in clear and unequivocal terms, confirming their liability for infringing EU competition rules in relation to the main facts, the decision is not as detailed as it might have been, running to just over thirty pages.

The EC document however does provide more than a glimpse of the extensive and broad-ranging nature of the cartel, giving key details of how the cartel was organised and how the European truck manufacturers colluded anti-competitively on truck pricing and emissions technologies. The link to the non-confidential, provisional version of the EC decision on the case (No. 39824) is viewable HERE.

The main points are:

  • Between 1997 and 2004, anti-competitive meetings between senior managers of the firms at headquarter level took place several times a year at trade fairs and other events and there were regular exchanges by phone and email. From 2002 onwards, there were regular meetings among business persons of the firms’ German subsidiaries who would report back to their respective headquarters.
  • The manufacturers harmonised their respective gross price lists across the European Economic Area (EEA) at the outset of the cartel.
  • They colluded on gross (and sometimes net) price increases for medium and heavy trucks throughout the EEA. This included exchanging detailed spreadsheets showing intended future prices split by truck standard model for each manufacturer.
  • The manufacturers discussed reducing rebates when the Euro (€) was introduced.
  • The manufacturers agreed on the timing of the introduction of new vehicle emission technologies, as well as how much to charge for the emissions technologies.

These points give an idea of just how deep rooted these illicit dealings reached into the road haulage sector and how damaging these can be, particularly for smaller operators and particularly at a time when the authorities are hell bent on imposing ever more stringent regulations regarding emissions and cab vision standards, all resulting in an inevitable boost in sales of new trucks for the manufacturers.

What is particularly galling to those who know the market is the longevity and cynicism of those involved. For example, as Euro Vl has become the standard, the collusion over medium and heavy duty trucks is known to have affected the pricing of emission technologies since before Euro lll was introduced. This activity is believed to have covered the entire area covered by the EEA and certainly the EC decision directly refers to a period lasting from 17 January 1997 until 18 January 2011.

The RHA has appointed well known transport law specialist solicitors Backhouse Jones to deal with the class action suit it intends to bring against the truck makers and the company has more details and updates viewable on the website.