November 20, 2014 / 4:03 PM / 3 years ago

Truckmakers face fines as EU steps up cartel investigation

European Commission First Vice-President Frans Timmermans listens to European Competition Commissioner Margrethe Vestager (R) during the first official meeting of the EU's executive body at the EU Commission headquarters in Brussels November 5, 2014.Francois Lenoir

BRUSSELS (Reuters) - The European Commission has stepped up a wide-ranging cartel investigation that could lead to heavy fines for some of the world's biggest truckmakers.

The Commission announced on Thursday that it had sent formal charge sheets to several manufacturers it suspected of price fixing, marking the next phase of a complex investigation that began with raids on a number of companies' headquarters in January 2011.

Daimler, Volvo and Iveco parent CNH Industrial all confirmed receipt of the European regulator's so-called statements of objections, together with Volkswagen-controlled Scania and MAN.

Companies can be fined up to 10 percent of their annual revenue if the Commission concludes that there is sufficient evidence of an infringement of EU rules barring cartels and the abuse of market dominance.

New EU Competition Commissioner Margrethe Vestager said on Thursday that she believed the case would be extremely difficult to resolve though agreed settlements, in which companies typically pay reduced fines in return for admitting anticompetitive behavior to expedite the investigation.

Vestager, who took office this month, also emphasized the broader impact of price-fixing.

"Keeping the cost of road transportation high has a damaging effect on the rest of the economy," she said during a news conference in Brussels.

In its 2013 annual report, Volvo said it may face a significant financial hit as a result of the price-fixing probe.

"It is probable that the group's result and cash flow may be materially adversely affected as a result of the ongoing investigation," the company said.

Daimler has also warned shareholders that it may have to pay "considerable fines".

The EU executive declined to identify the companies that had received notice of its findings, saying only that a large number were involved.

"The Commission has concerns that certain heavy and medium-duty truck producers may have agreed or coordinated their pricing behavior," the Commission said in a statement.

Writing by Laurence Frost; Additional reporting by Andreas Cremer, Jan Schwartz, Johannes Hellstrom, Helena Soderpalm, Edward Taylor and Alastair Macdonald; Editing by David Goodman

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