The Scania judgment of the EU General Court

I. Background – The Truck Cartel

The Scania judgment of the EU General Court[1] deals with one of the longest-running cartels in Europe. From at least 1997 until 2011, European truck manufacturers colluded with regard to medium- and heavy-duty trucks. They exchanged information and agreed on the increase of gross list prices and, in some instances, net prices. They also agreed on the timing of a price surcharge for the implementation of new emission standards.

The proceedings were initiated by a leniency application filed by the manufacturer MAN, followed by leniency applications filed by Iveco, Daimler and Volvo/Renault. These manufacturers and DAF reached a settlement with the European Commission in 2016. The European Commission imposed a total fine of € 2.9 billion on them, the up to that point highest cartel fine ever imposed in Europe.[2]

Only Scania, another suspected cartel participant, broke off the settlement negotiations. This raised eyebrows because Scania is part of the VW Group, which also owns MAN, the leniency applicant (today both are part of TRATON SE which is owned by Volkswagen AG).

While MAN was granted full immunity from fines, the European Commission imposed a fine of € 880 million on Scania on September 27, 2017 ("the Decision").[3]

Such an approach is called a “hybrid procedure,” meaning that the Commission applies a settlement procedure in respect of companies that put forward settlement proposals, while pursuing the procedure governed by the general provisions of Regulation No 773/2004[4] in respect of companies that do not wish to put forward such settlement proposals.[5]

Subsequently, Scania challenged the Decision before the competent EU General Court. Scania accused the European Commission of bias against Scania after the settlement decision, and of not applying the presumption of innocence. From Scania’s point of view, the European Commission would have had to wait for a legal assessment of the case against the other cartelists and the settlement decision until Scania had also presented all its arguments. According to Scania, the settlement decision had at least implicitly branded Scania as a cartel participant. Scania alleged that the Decision had not sufficiently taken into account Scania's arguments, had been based on information and documents not available to Scania, had therefore violated the Rule of Law, and had also not been in accordance with antitrust law.

This article will not go into the details of Scania's individual points of attack against the Decision. In this respect, reference is made to the comprehensive (115 pages long) and well-reasoned judgment of the General Court.[6] The General Court examined all the allegations in detail, measuring them against the established case law of the EU Courts and the European Court of Human Rights (ECtHR) on constitutional and administrative procedural standards. The General Court also carefully examined the antitrust objections raised by Scania and refuted them fully and convincingly. In this article, the focus will be on two things: First, it will raise the question of the significance the hybrid procedure used in this case has for the numerous antitrust damages proceedings against the Truck Cartel that are pending before national courts throughout Europe (II.). Secondly, it will discuss the likely influence of the Decision on the future of hybrid procedures (III.).

II. Impact of the hybrid procedure on the damages claims in the Trucks case

The Truck Cartel has not only broken records in terms of the fine imposed, the size of the affected volume of commerce, and the duration of the cartel. In many EU member states, the customers of the truck manufacturers, i.e., in particular freight carriers and logistics companies, are taking the cartel participants to court.[7] The claimants pursue damages for the trucks that were overpriced as a result of the cartel.

A. Impact of the hybrid procedure on damages cases

Most of the injured parties filed claims against the cartel participants that had settled the case, and thus benefitted from the binding effect of the settlement decision on national courts.[8] While those cartel participants oftentimes argued that a successful appeal by Scania would also benefit them, and the proceedings should be stayed in order to wait for the outcome of Scania’s appeal, this was not convincing in view of the binding effect of the settlement decision. As far as can be seen, courts did not follow that reasoning and did not stay their proceedings, at least with respect to trucks that were acquired from the cartel participants that settled the case.[9]

In the rare cases where Scania itself has already been subjected to claims for damages, courts usually stayed the proceedings in order to await a final decision by the European Courts on the action for annulment brought by Scania.[10]

Insofar as injured parties claimed damages regarding Scania trucks in proceedings against the cartel participants that settled the case, the claims faced the challenge that there was no binding decision that found Scania to have participated in the cartel. It thus was not clear whether damages resulting from the acquisition of Scania trucks were caused by Scania’s participation in the cartel or by an “umbrella effect,” i.e., the effect that a cartel increases the price level on the market, and competitors of the cartelists may follow the conduct of the cartel, raising their prices as well even without knowledge of the conspiracy. This would not have made a difference to the outcome of the case since the other cartelists are jointly and severally liable for all damages caused by the cartel in any event. But some courts still suspended proceedings relating to Scania trucks.[11] They explained that a national court should not treat Scania trucks in the same way as the trucks of other manufacturers, even on a preliminary basis, because the European Commission's decision to impose a fine on Scania contradicted the rationale behind the umbrella doctrine, while treating Scania as a cartelist interfered with the power of the European judiciary to make the final and binding decision on the matter. For that reason, those courts refused to adopt a pragmatic approach, according to which an economic as well as legal examination of the case with regard to Scania trucks could leave open for the time being the issue whether the claim was ultimately based on the umbrella doctrine or on Scania’s participation in the cartel.

At the time of writing Scania may still appeal the judgment of the General Court to the European Court of Justice. If Scania does not appeal the General Court’s judgment, the damages cases that have been stayed can finally move forward.

B. Impact of hybrid procedure on period of limitation for cartel damages claims

The most significant effect of Scania’s decision not to settle the case is that the period of limitation for cartel damages claims against Scania will expire significantly later than against the other cartelists. For claims against Scania, the period of limitation is suspended until a final judgment is issued, whereas the period of limitation against the other cartelists is running, at least in most jurisdictions. A Dutch court has explained convincingly on the basis of European law that the period of limitation is suspended against all cartel participants until the decision against Scania is final.[12] But so far, courts in other Member States have not followed the Dutch court, meaning that the period of limitation against the cartelists that accepted the settlement decision will expire soon in a number of jurisdictions, including Germany. Will this lead to a situation where a claim against Scania is the only option for victims of the cartel that did not file their claims yet? For now, it sure looks like Scania will continue to be jointly and severally liable for all damages caused by the cartel, and thus also for damages due to acquisitions from the other cartelists.

III. The future of hybrid procedures in EU antitrust proceedings

As summarized above, Scania alleged in its appeal against the Decision that the European Commission had been biased in the proceedings against Scania due to the settlement decision and had disregarded the presumption of innocence. But the European Commission was able to demonstrate that "tabula rasa"[13] was made following the settlement decision to ensure that proceedings against Scania were fair. For instance, the Commission carefully examined all facts again and did not rely on facts adopted in the settlement procedure.[14] The General Court confirmed that there was no obligation for the European Commission to only issue the settlement decision against the other cartelists after the proceedings against Scania had been finalized, and attested that the European Commission complied with the principles of the Rule of Law in the proceedings against Scania.[15] The European Commission thus showed that it is able to deal with hybrid procedures efficiently and lawfully.

For companies suspected of being involved in a cartel, this means that they can refuse a settlement that other companies agreed to and continue to fight their case without having to fear that they will be treated unfairly in the following proceedings. But Scania’s example also shows the challenges this strategy poses if the cartel participants that settled the case provided the European Commission with abundant information and evidence as part of their leniency applications. The “hybrid option” should thus only be chosen after careful consideration, also taking into account the dangers posed by the fact that in case of a fining decision and an unsuccessful appeal, the company may remain as the only target for damages claims if the period of limitation against the other cartelists has expired.

IV. Conclusion

The hybrid procedure applied in the Trucks case did not slow down damages claims against those cartelists that settled with the European Commission to a significant extent. In as far as proceedings regarding Scania trucks were stayed, they will continue once the Decision becomes final.

The General Court attested that the European Commission dealt with Scania’s case fairly despite the settlement with the other cartelists. This should give comfort to those companies accused of taking part in a cartel that want to fight their case while other companies settle. However, if the defense fails, such companies may be faced with liability claims while the period of limitation against the other cartel participants has already expired.

Dr. Ann-Christin Richter is a Partner and Dr. Christopher Unseld is a Senior Associate in the Berlin office. 

Footnotes

[1]     Judgment of the General Court of 2 February 2022, T-799/17 – Scania and Others v Commission, EU:T:2022:48.

[2]     Commission Decision of 19 July 2016, AT.39824 – Trucks, C(2016) 4673 final.

[3]     Commission Decision of 27 September 2017, AT.39824 – Trucks, C(2017) 6467 final.

[4]     Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty.

[5]     Judgment of the General Court of 2 February 2022, T-799/17 – Scania and Others v Commission, EU:T:2022:48, para. 100.

[6]     Judgment of the General Court of 2 February 2022, T-799/17 – Scania and Others v Commission, EU:T:2022:48.

[7]     Hausfeld represents aggrieved parties in courts in the Netherlands, the United Kingdom and Germany.

[8]     Art. 16 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.

[9]     A suspension of the whole procedure was favored in Germany by the District Court of Stuttgart, Decision 14 March 2019, 30 O 234/17, NZKart 2019, 357.

[10]    See, for example, in Germany the District Court Mainz, Decision 3 August 2018, 9 O 49/18, NZKart 2019, 116.

[11]    For instance the Munich District Court in a number of cases, which was accepted by the Higher Regional Court Munich, Decision of 9 January 2020, 29 W 1380/19 Kart, BeckRS 2020, 2169.

[12]    Appeal Court Amsterdam, Judgment of 4. February 2020, 200.226.640/0 I.

[13]    Judgment of the General Court of 2 February 2022, T-799/17 – Scania and Others v Commission, EU:T:2022:48, para. 129, 149.

[14]    Id. at para. 129 et seq.

[15]    Id. at para. 108 seq.