At a glance: automotive industry disputes in Germany – Lexology
What competition and antitrust issues are specific to, or particularly relevant for, the automotive industry? Is follow-on litigation significant in competition cases?
Notably, in the past few years the European Commission has investigated a number of car parts cartels and heavily fined original equipment manufacturers (OEM) suppliers located all over the world for anticompetitive practices, such as price fixing, bid rigging and the exchange of competitively sensitive information. These illegal practices concerned very different components such as alternators and starters, wire harnesses, parking heaters and automotive bearings. In addition, in July 2016, the Commission imposed fines of €2.93 billion on five European truck manufacturers for coordinating prices. This is the highest cartel fine the Commission has imposed so far. According to the findings of the Commission, the truck cartel existed for 14 years and was partly organised through the truck manufacturers’ German subsidiaries.
In 2018, the Commission opened an investigation to assess whether German car manufacturers agreed not to compete against each other on the development and roll-out of technology to clean the emissions of petrol and diesel passenger cars. This case was concluded in 2021 with a decision in which the Commission found that the German OEM breached EU antitrust rules by colluding on technical development in the area of nitrogen oxide cleaning. The Commission has imposed a total fine for the five OEM of €875 million.
In parallel to the EU Commission cases, the Federal Cartel Office (FCO) has conducted several investigations in the automotive sector over the past few years. For example, in June and December 2015, the FCO sanctioned six automotive part manufacturers for agreeing to fix prices in relation to acoustically effective components (textiles such as flooring, car mats, etc). The manufacturers were fined a total of €90 million.
In 2015, the FCO also initiated proceedings against three car manufacturers for restricting cooperation between brand retailers and independent online agencies. The manufacturers had implemented ‘internet standards’ for the introduction of end customers to brand retailers via internet-based new car portals. The FCO found that such standards reduced cooperation between retailers and car portals and therefore restricted competition by reducing market transparency. The proceedings of the FCO were discontinued in December 2015 after the car manufacturers revised their clauses.
In November 2019, the FCO imposed fines totalling around €100 million on German car manufacturers for exchanging information with steel manufacturers, forging companies and Tier 1 suppliers on surcharges for the purchase of long steel products.
The cartel decisions of the European Commission and the FCO have led to several follow-on damages actions before the German courts. Germany is generally regarded as one of the major forums within the EU for competition law damages claims. Implementation of the EU Cartel Damages Directive 2014/104 through an amendment of the German Act against Restraints on Competition (ARC) in June 2017 further boosted private enforcement, for example, through collective claims brought against cartelists in Germany. The recent cartel damage claims against truck manufacturers are mainly carried on by professional claim funding companies and US class action law firms (which have established offices in Germany).
In January 2021, the last amendment of the ARC entered into force. Implementing the ECN Plus Directive 2019/1, the German legislator enshrined an antitrust compliance defence in German law, making effective compliance efforts both before and after the infringement relevant for the assessment of a cartel fine from now on. Companies with effective antitrust compliance systems for the prevention and detection of cartel infringements as well as those that contribute to the detection of a …….