Henk Jan Nix, General Secretary of the European Group of Automotive Recycling Associations (EGARA), shares EGARA’s perspective on the implications of the recent cartel ruling, the options available to dismantlers, and how the industry can navigate this turning point.
Probably most now have heard about the cartel that the OEMs made against the car dismantling industry. On April 1st, the EC published an article on its website regarding a resolution in which producers (OEMs), including ACEA (the European car manufacturers’ association), were fined almost half a billion Euros.
The reason for this was anti-competitive practices, such as (despite the obligations written in the ELV Directive):
- The ‘Zero Treatment Cost’, which means that OEMs are not paying a fair price for the treatment of ELVs. OEMs have always stated that any recycling costs should be paid with the value of the ELV;
- OEMs collectively chose not to inform consumers about the recyclability of vehicles, preventing customers from factoring green choices into their car-buying decisions.
The final report is expected to be published shortly before the summer, but it may take longer.
Whistleblower
The period under investigation spans 15 years, from 2002 to 2017. Probably most will remember the raids at the OEM offices in the UK, about 3 years ago. EGARA was asked to describe the dismantling process by Antitrust. We knew something big was going on, but we didn’t know exactly what. Only Mercedes-Benz wasn’t fined, as they were the ones to report these practices to the EU, even though they joined the cartel from the beginning.
Claims
Many of us have already been approached by lawyers specialized in lawsuits for claims. However, so far, nobody has a clear idea of what’s going on exactly, what measures to take, or what to expect. Slowly, it’s becoming clear, and different ideas begin to transpire. Will the OEMs be more cooperative after this second scandal (remember Dieselgate)? We will try to provide some insight.
Cost compensation
Firstly, EPR systems are in place in some countries, and in these cases, ATFs received funding or had their costs covered for the treatment of ELVs. While there may be some debate around the applicable rates, not all countries’ ATFs were impacted by the cartel. Importantly, a claim is not a fine; it concerns funds that were withheld from their rightful recipient.
Position ACEA
ACEA claims that, although cartels are prohibited, consumers were not affected. While they may be correct regarding consumer impact, the response raises questions: does it suggest a willingness to cooperate, or does it imply they see little wrongdoing, and, in the absence of consequences, might consider repeating such actions?
Negative results
It was even mentioned that ATFs which couldn’t compete against illegals might have survived if they had a better position in getting certain costs compensated. Will they be able to make a claim? Or is a claim necessary to prevent further bankruptcy?
Considerations
Some of us believe that making claims may not win us friends and could damage our relationship with OEMs forever. Others are asking themselves what is necessary to make an OEM simply comply with its legal obligations. One could also wonder what the consequences could be of doing nothing now.
Desired results
A settlement could also be an option. This could be financial, or agreements about cooperation and recognition. Of course, a good relationship is what we prefer. A war will mean damage, and lawyers will be the only winners.
Who?
If anything is considered, it must happen on a national level. So, countries should decide for themselves whether to make a claim or not. EGARA will not make a claim. But her members are free to do so if they please.
Report
For now, we must wait for the report, which is expected to include both the evidence needed to support a claim and a description of the relevant procedures. Once it is published, we will review its contents and monitor the OEMs’ reactions. EGARA will strive to maintain a clear overview and keep its members well informed about the available options and potential consequences.
For the original EC article, see: ec.europa.eu/commission
