The EU General Court (GC) has rejected an appeal by Scania against the European Commission (EC) decision finding Scania was part of the trucks cartel.
Based on a press release issued by the GC on 2 February 2022, the GC has found that the EC did not breach Scania’s rights during the ‘hybrid’ procedure in which most of the cartel members agreed to settle the matter with the EC, while Scania chose not to settle but to contest the EC’s charges against it contained in the so-called statement of objections. The GC also confirmed the EC findings attributing to Scania a single and continuous infringement on the market for medium and heavy trucks in the European Economic Area (EEA).
Readers will recall that the EC issued a settlement decision in July 2016, imposing EUR 2.92bn in penalties on DAF, Daimler, Iveco and Volvo/Renault. MAN received full immunity from any fine having blown the whistle on the cartel which related to the heavy and medium heavy trucks market between 1997 and 2011, including passing on the cost of complying with new emissions rules to customers.
Scania elected not to enter into a settlement with the EC. As a result, the EC continued its proceedings against Scania and subsequently imposed a penalty of EUR 880m in September 2017.
Scania appealed the EC’s decision and fine and in June 2020 the GC conducted a hearing behind closed doors.
The GC has provided clarification on (1) the legality of the EC’s decision to follow a hybrid procedure combining the settlement procedure with standard administrative procedures in cartel matters and (2) the concept of ‘single and continuous infringement’.
The Hybrid Procedure
Rejecting Scania’s submissions, the GC observed that the EC’s decision to follow a hybrid procedure does not in itself entail an infringement of the presumption of innocence, the rights of defence or the duty of impartiality. The GC then went on to consider whether the EC had correctly applied those principles and ultimately confirmed that it had.
Presumption of Innocence
Scania argued that in applying the same findings contained in the settlement decision (which sets out the EC findings as to the existence of the cartel) and using the same evidence, the EC had infringed the principle of the presumption of innocence.
Rejecting the argument, the GC found nothing in the settlement decision that could likely be read as to imply a premature expression of Scania’s liability. Furthermore, the GC confirmed that the EC is bound firstly by the statement of objections and thereafter is required to review all the relevant evidence, which can include evidence used in both the settlement decision and the decision against Scania.
Right of Defence
Unsurprisingly given the finding in relation to the presumption of innocence, the GC considered that the fact that Scania was not heard in the context of the settlement decision procedure could not result in Scania’s right of defence being prejudiced and had in no way prejudiced Scania’s liability for the infringement.
Rejecting Scania’s submission, the GC confirmed that Scania had not established that the EC had not offered all of the guarantees during the investigation procedure to exclude any legitimate doubt as to its impartiality. The GC went on to confirm that the EC is in no way bound by its findings in a settlement decision when examining the position with parties who have elected not to settle. It further emphasised the EC discretion relating to consideration of evidence and confirmed that unless it can be demonstrated that the absence of such a measure is due to bias, then a refusal to adopt new investigative measurers is not contrary to the principle of impartiality.
Single and Continuous Infringement
The GC provided some interesting findings which highlight the nature of the infringement and how the cartel operated throughout the period with the conduct identified forming ‘part of an overall plan designed to achieve a single anti-competitive objective’. The key findings, which will be of interest to those involved in private or collective litigation against the truck manufacturers, are that the GC found that the EC had established to the requisite legal standard:-
- That the collusive contacts which took place over time at different levels, in particular at top management level between 1997 and 2004, at lower headquarters level between 2000 and 2008, and at German level between 2004 and 2011, taken together, formed part of an overall plan aimed at achieving the single anti-competitive objective of restricting competition on the market for medium and heavy trucks in the EEA;
- Further, that the existence of links between the three levels of the collusive contacts was apparent from the fact that the participants in the meetings were always employees of the same undertakings, there was a temporal overlap between the meetings held at the different levels and there were contacts between employees at the lower level of the respective headquarters of the parties to the cartel and the employees at German level.
- The nature of the information shared, the participating undertakings, the objectives and the products concerned remained the same throughout the infringement period. Thus, even though the collusive contacts at top management level had been interrupted in September 2004, the same cartel, which had the same content and scope, was continued after that date, the only difference being that the employees involved were from different organisational levels within the undertakings involved, and not from top management level.
- Given the finding above, the alleged fact that the Scania employees at German level did not know that they were involved in the continuation of the practices that had taken place at the other two levels, or that the Scania employees who participated in the meetings at lower headquarters level were not aware of the meetings at top management level was of no relevance to the finding that there was an overall plan. Awareness of the existence of such a plan must be assessed at the level of the undertakings (i.e., the overall groups of companies) involved and not at the level of their employees.
The GC applied the same principle to imputability confirming that the factors determining the imputability of the single and continuous infringement must also be assessed at the level of the undertaking. It found that since Scania directly participated in all the relevant aspects of the cartel, the EC was entitled to impute the infringement as a whole to Scania, without being required to demonstrate that the criteria of interest, knowledge and acceptance of the risk were satisfied.
The decision will be a welcome one for the many potential cartel victims seeking redress both in the UK and more widely across Europe. The finding that the collusive contacts formed part of an overall plan designed to achieve a single anti-competitive objective serves as a reminder as to why Scania was fined €880M with the remaining cartelists being fined €2.9bn which included discounts under the settlement decision.
It remains to be seen whether Scania will seek to appeal to the European Court of Justice.
A link to the judgment can be found below.