Truck manufacturer cartel: Buyers and lessees may claim damages

On July 19, 2016, the European Commission (COM) imposed fines totaling almost EUR 2.93 billion against truck manufacturers MAN, Volvo/Reno, Daimler, Iveco, and DAF for violating antitrust rules.

1. The truck manufacturer cartel

On July 19, 2016, the European Commission (COM) imposed fines totaling almost EUR 2.93 billion against truck manufacturers MAN, Volvo/Reno, Daimler, Iveco, and DAF for violating antitrust rules. The Commission's investigation revealed that the relevant companies had agreed, among others, coordinated prices at gross list level for medium (weight 6 to 16 tons) and heavy (over 16 tons) trucks from 1997 to 2011. According to reports yet to be confirmed, list prices, which are the basis for pricing in the industry, are said to have been up to 20% above actual market prices.

2. High losses incurred by the manufacturers' customers

As a result of the antitrust coordination, customers of the manufacturers for years paid inflated prices for the purchase or lease of medium and heavy trucks that were not reflecting a competitive market. Customers affected by the anti-competitive behavior may seek damages for compensation from the manufacturers in the amount of the difference between prices paid, based on the inflated list prices, and actual market prices for all trucks purchased or leased between 1999 and 2011. Subject to special circumstances in individual cases, purchases and leases from 1997 to 1999 should be time-barred.

3. Simplified enforcement of claims for damages

Companies affected by the antitrust violations are entitled to claim damages irrespectively of the fines imposed on the manufacturers. What this means for this particular case is that compensation may even be demanded from MAN, although MAN had been relieved from paying fines since it had initiated the proceedings as a principal witness.

Legislation supposes that customers are always incurring financial loss in case of a price cartel discovered by the authorities. Affected companies may file for damages against all of the cartel members or individual members of the cartel, regardless of the manufacturer from which it has purchased the vehicles.

Any affected party must, however, quantify the exact amount of its antitrust harm. If it cannot be unequivocally proven how high the actual cartel surcharge has been in relation to market pricing, it is up to the court to estimate the damage incurred.

What is particular in the case of the truck cartel is that the manufacturers cannot refer to the fact that the damage caused by the cartel had been passed on by the parties affected to their own customers. As a rule, the purchased and leased trucks were not resold, but used by the buyers/lessees themselves. This considerably facilitates the assertion of claims for damages for the parties affected.

4. Swift action and preparing of a trial

Certain urgency is required for customers wishing to claim compensation for damages from the manufacturers relating to purchases and/or leases from 1999 to 2002, because depending on the individual circumstances, the limitation period may enter into effect from January 19, 2017.

Since the facts need to be carefully prepared for antitrust damage suits, parties affected should start to compile the required documents as early as possible. It is recommended to prepare an Excel spreadsheet listing the individual purchase or lease agreements concluded with the relevant manufacturers between 1997 and 2011, including the relevant data on chassis numbers, manufacturers, brands, vehicle models, prices paid, discounts, and list prices. At the same time, a request for inspection of certain documents of the European Commission should be filed.

5. Review procedures to minimize cost and risk

It may well be useful to file for damages against the cartel members jointly with other claimants. This will reduce cost to individual parties and increase the impact, such as by ordering an expert opinion on market pricing expected in the absence of a cartel agreement. If the cost risk is deemed to be too high, claimants may also turn to litigation funding specialists who will assume cost of legal counsel and court fees against a percentage of the amount awarded by the court.

The chances to succeed in enforcing claims for damages against the manufacturers involved in the truck cartel are generally good. In the case at issue, cartel members will be unable to refer to a transfer of the harm, which increases affected parties' opportunities of compensation yet again. The amount of damages must be determined individually for each party affected and, where unavailable, is to be estimated by the court.