Enforcement against cartels operating in the EU motor parts sector

Car Factory Print publication


The motor parts industry has been subject to a high number of fines by the European Commission and national competition authorities for participation in cartels which affect trade in the EU. Fines are often for eye-watering amounts. This briefing summarises recent instances of enforcement action in the sector and should act as a reminder of why it is essential for businesses operating in the EU to develop effective competition law compliance policies and practices.

Recent enforcement activity

The motor parts sector is no stranger to the attention of the European Commission. Recent years have seen the following extensive range of cartel investigations:

  • car glass: Combined fines totalling €384 billion (later reduced somewhat on appeal) were imposed in 2008 on participants in a market sharing cartel in the supply of car glass. The participants were Asahi, Pilkington, Saint-Gobain and Soliver. Pilkington is contesting the finding that it participated in the cartel with an appeal pending to the EU’s highest court, the Court of Justice of the European Union
  • parking heaters: In June 2015, the Commission fined a German supplier of fuel-operated parking heaters (which heat parked cars or trucks) and auxiliary heaters (which support the heating system of a running car or truck) €68,175,000 for colluding with the only other supplier of competing products within the EEA to co-ordinate prices and allocate customers. The competing supplier was granted full immunity following a leniency application. The fine on the German supplier was reduced by 10 per cent via the settlement process, a process whereby a cartelist may admit wrongdoing in return for a reduced level of fine
  • alternators and starters: The Commission recently fined Mitsubishi Electric and Hitachi €8 million for their participation with Denso in a cartel covering alternators and starters used in cars. The companies entered voluntary settlements with investigators, thus gaining reductions in their fines. Denso avoided a €157 million penalty by blowing the whistle on the conduct. Regulators in the USA and Japan have also fined several companies for price fixing related to alternators and starters
  • automotive wire harnesses: In July 2013, producers of wire harnesses were fined an aggregate of €141 million in a cartel settlement agreement. The participants had co-ordinated prices and allocated amongst themselves contracts for supply of harnesses to car manufacturers
  • automotive bearings: In March 2014, producers of car and truck bearings were fined €953 million in a cartel settlement. The companies had co-ordinated the passing-on of steel price increases to their automotive customers, colluded on requests for quotations and for annual price reductions from customers and exchanged commercially sensitive information in respect of the supply of bearings to several motor manufacturers
  • foam used in car seats: In January 2014, the Commission fined producers of foam for mattresses, sofas and car seats €114 million in a cartel settlement. The companies had colluded to co-ordinate the sale prices of various types of foam for nearly five years across 10 Member States.

There are several ongoing inquiries where no decision has yet been made on infringement:

  • seat belts, airbags and steering wheels: The Commission carried out dawn raids in 2011
  • thermal systems for cars: The Commission conducted unannounced dawn raids in May 2012 on suppliers of air conditioning and engine cooling systems for cars
  • car lighting
  • automotive exhaust systems: The Commission carried out unannounced dawn raids on alleged participants in a cartel relating to the supply of automotive exhaust systems in March 2014. The Commission considers that there may have been a breach of both Articles 101 and 102 of the Treaty on the Functioning of the European Union i.e. an anti-competitive agreement and abuse of dominance.

Cartel investigations have not been confined to the EU level. Across Europe, national regulators have been taking action against alleged participants in motor parts cartels. For example, last June, the German Bundeskartellamt fined five makers of textiles used in cars a total of €75 million for colluding on tenders and, last July, the Spanish authority fined 21 car producers and distributors a total of €171 million for systematically exchanging sensitive data on car sales and aftermarket sales.

As the Spanish case shows, it is not just motor parts that are in the spotlight. The Commission carried out dawn raids in 2011 into a suspected pricing cartel in the truck sector. A Statement of Objections was issued to a number of heavy and medium duty truck producers in November 2014, setting out the Commission’s suspicions that the alleged cartel participants had agreed or co-ordinated their pricing decisions. Press reports describe a cartel operating for 14 years with the object of delaying the progress of emissions-reducing technology. The companies involved are believed to be DAF, MAN, Iveco, Scania, Volvo and Daimler.

Individuals who participate in a cartel may face imprisonment. A reminder of this from the UK motor sector came in 2013 when the then Office of Fair Trading (now Competition and Markets Authority or CMA) imposed fines totalling over £2.8 million on Mercedes-Benz and four of its dealers in March 2013. (A fifth dealer was granted full immunity under the OFT’s leniency policy). The investigation involved the arrest of a senior Mercedes Benz executive for the so-called “cartel offence” under the Enterprise Act 2002 though he was later released without charge. The infringements related to market sharing, price co-ordination and the exchange of commercially sensitive information between the dealers with the object of restricting competition for sales of vans or trucks in the dealers’ respective areas. Mercedes Benz had facilitated or turned a blind eye to the co-ordination between dealers. The CMA took the view that the supplier in such an arrangement has what it described as “a central position” in relation to the other parties (its dealers) and, as such, must “display particular vigilance in order to prevent concerted efforts [by its dealers] from giving rise to practises contrary to competition law”.

Victims can seek damages for harm suffered as a result of cartel activity. For example, in December 2015 it was reported that Peugeot Citroën had filed a damages claim at the UK Competition Appeal Tribunal against Pilkington and other members of the car glass cartel to run alongside a High Court action that it had already instituted. Peugeot claims that it continued to suffer excessive car glass prices for some eight years after the cartel ended.  BMW, Rolls-Royce, Volvo and Saab are also suing Pilkington in the UK.  More recently, Peugeot Citroën launched a further action for damages before the UK Competition Appeal Tribunal to seek compensation from the cartelists in the automotive bearings cartels. Legislation designed to make such claims easier is currently being implemented within the EU (though it will not involve significant changes to UK practice).


In recent years the motor parts sector has been repeatedly subject to successful anti-trust investigations by European competition authorities. In addition to the risk of fines and imprisonment and of commercial agreements being unenforceable, vehicle manufacturers are gaining appetite for claiming damages from parts suppliers who have broken the law. Involvement in any anti-competitive activity in this sector is clearly high risk. The preference from a compliance and a commercial perspective should be to introduce documentation and practices that are competition law compliant including a compliance manual and training for directors and staff. It is key that directors and staff should understand the do’s and don’ts and the pitfalls of breaching the law.

How Walker Morris can help

At Walker Morris, we have significant experience of advising companies in the motor sector at all levels of the supply chain (parts suppliers, vehicle manufacturers, dealers and associations) across all disciplines (such as litigation, IP and trade marks, mergers and acquisitions, financial regulatory, employment and property).

We have specialist experience advising on the array of commercial/competition issues arising under EU case law and regulations and impacting dealer network structure and agreements, warranty terms, parts supply, vehicle servicing, access to technical information, parallel imports, online sales and so on. Members of the Competition team have undertaken secondments with the UK and EU competition authorities and in-house in the motor sector. Time spent on “each side of the fence” affords the team a rounded perspective on the application of competition law in this important sector.

Should you like further information on our services, please do not hesitate to contact any member of our Competition team.