As part of a landmark cartel damages ruling, Europe’s leading lorry manufacturer must pay Royal Mail to BT approximately PS20 million. This could open the door for additional compensation orders.
Experts in competition predicted that DAF, a Dutch company with a headquarters in Eindhoven, would pay Royal Mail more than PS17million after the London competition appeal tribunal ruled that damages should be awarded to both British companies.
Lawyers claimed that it was the first time the tribunal had ordered “follow-on damages” against one of the defendant companies following an earlier European Commission decision that they were part in a cartel.
The Dutch company is expected to pay Royal Mail approximately PS17.5million in compensation after the amount DAF was found to have overcharged for its cartel involvement. This figure is based upon evidence presented to the tribunal that Royal Mail’s “value in commerce”, which was the total amount spent by the company on trucks purchased from DAF over the period of EU law infringement, was greater than PS260 million.
BT could be eligible for a lower amount of compensation, possibly around PS3 million, as the tribunal determined that BT’s commerce value was nearly PS45 million.
These figures have been estimated because the tribunal instructed the parties that they attempt to reach a settlement. The case will be rehearsed if they fail to reach a settlement. This tribunal’s decision is the latest ramification from a 2016 Brussels commission ruling that found five truck manufacturers — DAF/MAN, Daimler/Iveco, Daimler/MAN, Daimler and Volvo/Renault – had violated EU cartel law.
The ruling found that the companies had made illegal “collusive arrangements” on pricing and gross prices increases. . . For medium and heavy trucks” between 1997-2011
According to the judges, the hearing before the London tribunal was “the first of many such claims arising from the infringement to be tried in the UK”.
Royal Mail and BT both claimed that they had purchased or leased large quantities of lorries from DAF in the infringement period. Prices and lease payments were much higher than they would be if the companies hadn’t formed an illegal cartel.
Both companies sought damages for overcharging and other consequential losses.
Experts in competition law predicted that the tribunal’s decision would open the door to future claims. Suzanne Rab, a barrister at Serle Court in London, said that “the tribunal’s overcharge is very high” given the fact that relevant trucks can be worth from PS60,000 to PS300,000.
Rab stated that the ruling “likely to encourage other trucks cartel claimants, whose claims remain heard and fuel the growing momentum for competition damages claims in Britain”.
DAF is the European market leader in truck manufacturing according to data published last year. It claimed to own a greater than 31% share of the UK market and to also be the top seller in its home country, as well as in Belgium and Poland, Hungary, Hungary, Bulgaria, and Bulgaria.
Although the company is based in the Netherlands the company is actually a division Paccar, an American multinational headquartered near Seattle.
DAF sold over 7,500 trucks last year outside of the EU and UK. It claimed that it also had record sales in Israel and Colombia, Ecuador, and Australia.
Royal Mail spoke out to say that the company was happy with the decision of the tribunal. This outcome took us six years. We are still waiting for confirmation on the award of final damages.
DAF spokesmen in the Netherlands stated that they would not comment on the ruling of the tribunal.