The Car Sector In The EU: Unannounced Inspections & More

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The car/automotive sector plays an essential role in any economy. Over the past 10 years, the European Commission (EC) has been focusing on protecting competition in this crucial sector: 9 cartels in the automotive sector have been uncovered and  companies have been fined a total of more than EUR 6 billion for their illegal behaviour.[1] Below we provide you with the highlights of the main developments in the EU car sector for September-October 2017 .

  • Unannounced inspections

On 20 October 2017 the European Commission (EC) confirmed that it carried out an unannounced inspection at the premises of a car manufacturer in Germany due to certain concerns that the several German car manufacturers may have acted in breach of the EU competition rules that prohibit cartels and anticompetitive business practices.

Conducting inspections is only a preliminary step in investigations of suspected anticompetitive practices, and there is no presumption that the inspected companies are guilty, just as it does not prejudge the outcome of the investigation. There is no legal deadline to complete the inquiries.

  • Trucks cartel and EUR 880 million fine

On 27 September 2017 the EC concluded its investigation and imposed the EUR 880 million fine on Scania, a heavy truck producer, for participation in the trucks cartel that lasted 14 years (from 1997 until 2011, when the EC carried out unannounced inspections of the firms). Scania colluded with five other truck manufacturers (MAN, Volvo/Renault, Daimler, Iveco, and DAF) on truck pricing and on passing on the costs of new technologies to meet stricter emission rules.

Volvo/Renault, Daimler, Iveco, and DAF acknowledged their liability for the cartel and reached a settlement with the EC back in July 2016 and were faced with EUR 2.93 billion fine (which included a 10% reduction as a “reward” for cooperation with the EC). MAN was not fined at all as it revealed the existence of the cartel to the EC.

The collusion was done via meetings held at senior manager level, sometimes at the margins of trade fairs or other events; phone conversations and with participants generally exchanging information electronically. The discussions between the companies covered the such topics, as the price increases, timing for the introduction of new emissions technologies and the passing on to customers of the costs for the emissions technologies.

Concluding remarks

The cases discussed above are good examples of leniency program in action. They emphasize that cooperation with the competition authority and reaching a settlement may provide either full immunity from or a substantial reduction in a fine.  Those who choose not to cooperate with the competition authority during the investigation cannot benefit from any fine reduction (e.g. Scania).

 

For more information: info@actecon.com 

[1] http://europa.eu/rapid/press-release_STATEMENT-17-3509_en.htm

Source of the picture: http://fxi.com/solutions/auto-transportation-foam/heavy-trucks.php

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