First Spanish Judgments in trucks cartel follow-on actions

The trucks cartel sanctioned by the European Commission in July 2016 has provoked a flood of individual claims all over Spain. They were filed by all types of transport and logistics companies against the six sanctioned manufacturers, their Spanish subsidiaries and even their financial services providers. Apart from several decisions on jurisdiction and access to evidence, the Commercial Courts in Murcia and Zaragoza have already delivered three Judgments on the merits and one Judgment in absentia. Two claims have been dismissed (one in Murcia and one in Zaragoza) and two claims have been upheld (Murcia).

Background of all four cases

On 19 July 2016, the European Commission fined manufacturers of medium and heavy-duty trucks over € 2.93 billion for their participation in a price-fixing trucks cartel covering the entire European Economic Area and lasting 14 years from 1997 to 2011 (Case COMP/39824 – Trucks). The Commission sanctioned MAN, VOLVO/RENAULT, DAIMLER, IVECO and DAF. On 27 September 2017, the Commission imposed a subsequent fine of € 880 million against SCANIA. According to the Commission, the trucks cartel consisted of collusive arrangements on pricing and gross price increases in the EEA for medium and heavy trucks, and the timing and the passing-on of costs for the introduction of emission technologies for medium and heavy trucks, required by EURO III to VI standards. The cartel has illegally and artificially increased the prices of trucks throughout Europe. Purchasers of trucks have been overcharged by the truck manufacturers.

Following this decision, four claimants filed actions before Spanish Commercial Courts asking for compensation for the damages caused by the cartel. The four Judgments contain interesting details about the case, the liability of the cartel members and the proof of the damage. Two claims have been completely dismissed. Yet one claim has been partially upheld, and another one has been completely upheld. In the following, the main aspects of each Judgment are discussed.

1. Commercial Court of Murcia, Judgment of 26 September 2018

(a) Facts and procedural questions

The claimant, a company based in Murcia filed a claim against VOLVO GROUP ESPAÑA S.A. asking for a compensation of €14,795 based on a lease agreement concerning one truck. Defendant VOLVO GROUP ESPAÑA did not appear before the court within the foreseen deadline.

(b) Liability and passive legitimation

The Court confirmed the liability of the defendant based on the decision of the European Commission. The Judgment does not question the liability of VOLVO GROUP ESPAÑA S.A. as a subsidiary, since it simply refers to the participation of the defendant in the cartel sanctioned by the Commission. The Court confirms that it is not necessary to prove the effects of the conduct to consider that an agreement is anticompetitive. It also considers that the decision of the Commission has a binding effect on the damages action, but only in relation to the conduct itself and not regarding its effects or potential damage. Notwithstanding, the Judgment does not condemn the defendant to pay any type of compensation for damages since the expert report of the claimant was filed after the deadlines foreseen by the court and the procedural rules. The Judgment does not analyse the expert report and dismisses the claim concerning compensation.

It is important to note that the defendant did not file its response in time and thus the Judgment is in absentia. Consequently, the discussion on the merits was limited.

2. Commercial Court of Murcia Judgment of 15 October 2018

The Commercial Court of Murcia upheld one of the first damage actions filed against VOLVO GROUP ESPAÑA S.A. The latter must pay a compensation of €128,756 to the claimant, a lessee of five Renault trucks. It is important to highlight that the defendant alleged that it was not able to answer the claim in time due to an incorrect notification of the claim.

(a) Facts

The Court analyses the damages caused to an individual that leased five Renault trucks in October 2012. This person filed the claim against Volvo Group España S.A. as the legal successor of Renault Trucks España S.L. The claimant asked for the declaration of liability of Volvo Group España S.A. and initially for compensation of €148,680 for the damages caused due to the lease of five Renault Magnum 520.1ST trucks. The compensation request was reduced to €128,756 after filing the expert report which corrected the initial amount. Defendant Volvo Group España S.A. did not answer the claim within the foreseen time and only appeared before the court in the preliminary hearing and in the oral hearing. The Court did not accept the statement of defence, and considered that the damages suffered by the claimant had been proven up to an amount of €128,756.

(b) Defendant capacity and liability of Volvo Group España S.A.

Volvo Group España S.A. is not an addressee of the decision of the Commission. Notwithstanding, the Court considers that the company can be defendant in the proceedings since it is the legal successor of Renault Trucks España S.L. The Court does not analyse the liability of Volvo Group España S.A. in detail but as part of the Volvo Group. It does not distinguish whether they are addressees of the decision or not. It declares the liability of Volvo/Renault concluding that the defendant Volvo Group España S.A. also breached EU competition law. Notably, the commercial court of Murcia does not discuss in detail if the defendant being part of the Volvo Group can be held liable or not, and just declares that the defendant also breached EU competition Law.

(c) Estimation of the damage

The claimant filed an expert report with an estimate of the damage. Taking into account that the defendant did not submit any report since it missed the deadline for the response the judge accepts the conclusions of the report and evaluates them very briefly. The judge considers that the report does not contain any findings that could be regarded as illogic or arbitrary. The report estimates the damage as follows:

  • Overcharge: The expert refers to the study Cartel Overcharges and the Deterrent Effect of EU Competition Law by the ZEW that makes a general estimation of overcharges caused by 191 cartels in Europe. According to this study, the median overcharge rates are 20.70 per cent and 18.37 per cent of the selling price. The expert report analysed by the Court applies this percentage to the lease costs paid by the claimant and concludes that the overcharge amounts to €86,940. Additionally, the expert calculates that the claimant paid a higher tax rate due to the overcharge. The taxes caused amount to €15,649. Finally, the expert report considers, without giving much details, that the cost of the delay in the introduction of new emission technologies amounts to € 4,435 per truck.
  • Loss of profit: The report concludes that although it has been proven that the cartel caused a loss of profit due to the overcharge, the expert does not have the necessary pieces of evidence to quantify this loss of profit.

This judgment is one of the first judgments in follow-on actions based on a decision of the European Commission in Spain. It is an individual claim, and the damage expert report was prepared with limited resources. Additionally, the defendant has not made any objections on the merits. Notwithstanding, the judge easily confirms the liability for the damage caused by the cartel.

3. Commercial Court of Murcia, Judgment of 16 October 2018

One day after, another judge of the same court dismissed a similar claim filed against MAN FINANCIAL SERVICES ESPAÑA S.L., the leasing subsidiary of the Volkswagen Group. In this case, the judge has fully rejected the claim since she considers that MAN FINANCIAL SERVICES S.L. could not be a defendant.

(a) Facts

The claimant asked for a compensation of €57,318 for the damage caused due to two leasing agreements concluded with the defendant on 22 October 2008. The defendant, MAN FINANCIAL SERVICES ESPAÑA S.L. is not an addressee of the Commission decision. On 1 January 2014, the defendant split from the MAN Group and was merged into the VOLKSWAGEN Group. The current shareholder of MAN FINANCIAL SERVICES ESPAÑA S.L. is VOLKSWAGEN FINANCE S.A.

(b) The capacity of the defendant

The defendant alleged that it could not be part of the proceedings since MAN FINANCIAL SERVICES ESPAÑA S.L. was not an addressee of the decision and was not part of the MAN Group when the sanction was imposed in July 2016. The Judgment defines passive legitimation as the capacity of having an objective connection to the material questions of the proceedings. The defendant provided pieces of evidence about the split from the MAN Group in 2014 and about the current ownership of/merger into VOLKSWAGEN FINANCE S.A. The Judgment concludes that since MAN FINANCIAL SERVICES ESPAÑA S.L. does not belong to the MAN Group it is not an addressee of the decision, and it has not been proven that the defendant could have taken part in another way in the price-fixing agreement.

4. Commercial Court of Zaragoza, Judgment of 13 December 2018

(a) Facts

In October 2017, two claimants filed a claim against DAIMLER AG and AB VOLVO before the commercial court of Zaragoza. The claimants sought compensation of €150,543 from DAIMLER AG and €334,567 from AB VOLVO. The Commercial Court of Zaragoza dismissed the claim since the expert report did not prove the damage caused by the cartel. Although the result can be considered unfavourable for claimants, the Judgment contains certain conclusions that may be useful for claimants in other proceedings that we would like to highlight.

(b) Language versions of the Commission decision and exchange of information

The defendants alleged that the binding text of the decision of the European Commission didn’t refer to a price-fixing cartel but rather to an exchange of information that didn’t have any effects on the market. The Court rejects this argumentation and confirms that the exchange of information can be as harmful as a hardcore cartel. It is correct that the Spanish translation of the summary is not the decision as such and it is therefore not binding for the courts, but the defendants have not proven any discrepancies between the summary and the decision. The defendants have not requested any clarification or amendment from the European Commission. Additionally, the Judgment considers that although the summary does not refer to a specific price-fixing agreement, it can be concluded that an agreement existed. Finally, the Judgment finds that the fact that it is not necessary to prove the effects of the cartel in the market for the Commission’s fining decision does not mean that the conduct didn’t have any effects. Therefore, the Commission decision does not impede the damage action.

(c) Applicable rules and transposition of Directive 2014/104/EU

According to the Judgment the transposition of the Directive cannot apply retroactively to damage actions against the truck cartel. The claimant has therefore to prove the existence of the damage and the causality as established by general tort rules. The Judgment then rightly confirms that the passing-on defence as foreseen in the Directive cannot apply to the present case and rejects the access to pieces of evidence requested by the defendants. Additionally, the judge firmly denies claims of inadmissibility of a passing-on defence where a conduct caused harm. Passing-on is not possible if there was no harm caused to the purchaser. If the defendants invoke the passing-on defence, they are implying that the conduct caused harm.

(d) Expert report

The claimants in Zaragoza presented an expert report prepared on the same basis as the expert report filed in the court of Murcia. The report calculates the damages taking the average overcharge of 20.87 % estimated in the study “Cartel Overcharges and the Deterrent Effect of EU Competition Law” by the ZEW. Additionally, the report concludes that 100% of the costs of the technology change from EURO III to EURO VI were added to the price of the trucks affected by the cartel. However, the judgment concludes that this report, serving as a basis for several claims that have been filed in Spain, is not correct. In the Court’s view, the estimation of the overcharge of 20.87% based on statistics can only be done once on the final price of the vehicle (including the costs of the new emission technologies).

The Judgment recognises the difficulties faced by the victims when they need to estimate and prove the caused damage. In addition, the judgment refers to the Commission’s practical guide on “Quantifying harm in actions for damages based on breaches of article 101 or 102 of the treaty on the functioning of the European Union” and specifically to paragraph 145:

These insights into the effects of cartels do not replace the quantification of the specific harm suffered by claimants in a particular case. However, national courts have, on the basis of such empirical knowledge, asserted that it is likely that cartels usually do lead to an overcharge and that the longer and more sustainable a cartel was, the more difficult it would be for a defendant to argue that no adverse impact on price did take place in a concrete case.”

Following this approach, the study above is not considered enough to prove the specific damage sustained. The study could only serve as evidence for the general effects of the conduct in the market. For the judge, the model should consider the following aspects when estimating the effects of the agreement on the final price:

  • Extra features and equipment that are added to the basic model
  • Particular circumstances of the contracts
  • Financial arrangements
  • Distinction between direct purchases, purchases through the official distributor or through an independent distributor.

The judgment considers that this exercise may be complicated but not impossible and it should be based on documents obtained from several sources and not only based on the invoices of the sellers.

This judgment contains interesting conclusions on the expert report and the evidence to prove damages. Although the expert report filed by the claimants could be considered as too simple, the requirements listed by the judge seem in our view too strict. This could limit the effective compensation rights of claimants since in many cases the victims only retain invoices and the payment documents.

by Julia Suderow (3C Compliance)

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