EU slaps $1-bn fine on Volkswagen truck unit for price fixing

Volkswagen’s tarnished reputation suffered another blow after its Scania unit was slapped with a £880.5-million ($1.03 billion) fine for fixing truck prices, a year after other members of the cartel reached a record settlement with the European Union.

The European Commission, the EU’s antitrust regulator in Brussels, said Scania colluded for 14 years with five other truck manufacturers on truck pricing and on passing on the costs of new technologies to meet stricter emission rules.

Volkswagen now faces compensation claims from truck buyers who paid too much and may also be dragged into other EU cartel probes over alleged collusion with Daimler and BMW on technology standards. Those add to other European investigations and lawsuits over the manipulation of car diesel emissions. The firm has already paid billions of dollars in settlements in the US.

Scania, which denies any wrongdoing, set aside just 3.8 billion Swedish kronor ($470 million) last year to cover a potential penalty after the other truckmakers were fined nearly £3 billion for working together on sales. It said it will challenge the fine at the EU courts.

Scania’s fine “is slightly above expectations” and “the potential damages claims by logistics companies that are now being prepared sound ominous in terms of the potential financial impact,” said Christian Ludwig, an analyst at Bankhaus Lampe in Germany, in a phone interview.

Still, Ludwig said, “the chances of this coming to pass seem remote as it’ll be difficult to prove the actual damage.”

The other truckmakers settled with the EU, winning a discount on their fine and denying them a chance to sue regulators. The Scania fine is the EU’s second-highest ever for one company in a price-fixing case, topped only by a £1.01 billion penalty for Daimler in last year’s decision.

“This cartel affected very substantial numbers of road haulers in Europe, since Scania and the other truck manufacturers in the cartel produce more than nine out of every 10 medium and heavy trucks sold in Europe,” EU Competition Commissioner Margrethe Vestager said in a statement on Wednesday.

The fine casts another cloud over Volkswagen as the automaker seeks to emerge from the two-year-old diesel-cheating scandal, which has cost it £22.6 billion in penalties and damages.