1. Information exchanges. The carmakers cartel
Javier García-Verdugo
Chief Economic Advisor, CNMC
ACE Annual Conference, 16 November 2017

2. Case S/0482/13 - Carmakers
Infringement of article 1 of the Spanish Competition Act (SCA) and article 101 of the TFEU, consisting in exchanges of strategic and confidential information regarding business management, aftermarkets and marketing
Reduction of competitive pressure with the ultimate goal of achieving homogeneity of market offers and mutual control
Very serious infringement (art c SCA)  Fine: up to 10% of total turnover (art. 64 SCA).
25 June Leniency application by SEAT
23 July 2013 Conditional exemption from payment of the fine granted to SEAT and its subsidiaries (VOLKSWAGEN AUDI E. and PORSCHE I.)
23-26 July Dawn raids carried out at headqquarters of TOYOTA, NISSAN, SNAP-ON, and RENAULT
30 August 2013 Start of proceedings
27 January 2015 Statement of objections
23 July Prohibition decision with fines

3. Undertakings involved
Companies
CITROËN ESPAÑA
B&M ESPAÑA (MITSUBISHI)
BMW IBÉRICA
CHEVROLET ESPAÑA.
CHRYSLER ESPAÑA
FIAT SPAIN
FORD ESPAÑA
GENERAL MOTORS ESPAÑA
HONDA MOTOR EUROPE (Opel)
HYUNDAI MOTOR ESPAÑA
KIA MOTORS IBERIA
MAZDA AUTOMÓVILES ESPAÑA
MERCEDES BENZ ESPAÑA
NISSAN IBERIA
PEUGEOT ESPAÑA
PORSCHE IBÉRICA
RENAULT ESPAÑA
SEAT
TOYOTA ESPAÑA
VOLKSWAGEN AUDI ESPAÑA (AUDI, SKODA and VW)
VOLVO CAR ESPAÑA
Cartel facilitators
SNAP-ON BUSINESS SOLUTIONS
URBAN SCIENCE ESPAÑA
22 car distribution companies (*), 29 brands and 2 cartel facilitators (consulting firms) involved
Product market: Distribution and marketing of new and used vehicles, automotive spare parts, accessories and aftersales activities
90% market share in car distribution in Spain
(*) Note: only 21 companies listed because ORIO SPAIN (Saab) was included in the investigation, but the infringement could not be proved.

4. Categories of information exchanges
Forums for IE
Time period
Companies involved
Information common to all forums
Forum-specific information
Secrecy, frequency and means of exchanges
“Brands Club”
Origin of information exchanges
Feb July 2013
20 + SNAP-ON (from 2009)
Profitability and sales of dealer networks (total and by automobiles sales and aftermarkets activities)
Commercial margins and remuneration policy offered by brands to dealer networks (disaggregated)
Structure, characteristics and organisation of dealer networks
Conditions of current and future policies, and commercial strategies of aftermarkets marketing
Marketing campaigns
Customer loyalty programs
Policies regarding external sales channel and best practices of networks’ management
Monthly sales by car model
Distribution and sales of participating brands’ vehicles
Twice a year (aprox. 16 meetings)
Formal mechanisms to ensure secrecy
“Exchange of aftermarkets indicators Project”
Growing importance of aftermarkets
March August 2013
17 + URBAN
Reports and forum meetings regarding aftermarkets
Sales of spare parts, accessories and motor oil by brand
Disaggregated billing, number and reason of visits to repair shops, and tire sales
Number of dealer shops with aftermarkets services and external sales
Quarterly meetings
Monthly, quarterly and yearly reports
Confidential and non-publicly available information
“Builders’ Workshops”
April March 2011 14
Conditions and commercial policies of aftermarkets marketing
Evolution of turnover
Aftermarkets marketing campaigns
Future commercial strategies
Meetings of aftermarkets marketing managers

5. Highlights of the conduct
Exchanges of confidential information
Huge level of detail and disaggregation
Current and updated information related to sales and aftermarkets
The information was shared periodically plus regular meetings
Exchanges by senior managers of the relevant areas, who reported to the senior managers of the companies.
Formal mechanisms to guarantee secrecy: use of codes, bcc recipients…
Instrumental services by SNAP-ON and URBAN (arranging and participation in meetings, gathering and circulating data)

6. Expert reports Commissioned by Date Prepared by Title
12 Companies: BMW,
Chevrolet, Fiat, Ford, Honda, Hyundai, Kia, Nissan, Opel, Peugeot, Renault y Toyota
19 May 2015
Compass Lexecon
“Economic analysis of the exchange of information between brands in the motor vehicles sector”
Nissan
25 Feb. 2015
RBB Economics
“Analysis of information exchanged by Nissan and other automobile brands and assessment of its effects on the market”
Urban Science
20 Feb. 2015
Charles River Associates
“Economic Assessment of the Statement of Objections”

7. Allegations
On affected market definition: there are two markets, sales and after- sales, not only differentiated, but disconnected; and in the aftermarket there is no competition between brands
On the qualification of the conduct as a cartel, i.e. an infringement by object. Both the leniency applicant and the Competition Authority were biased towards the classification of the conduct as a cartel.
On the nature of the information exchanged and on the nature of the agreements. It is alleged that the information exchanged was not strategic, since it was aggregated, of public nature, and not updated; furthermore, the data were exchanged on an occasional and intermittent basis.
On the anti-competitive effects of conduct. It was alleged that the exchange of information did not have anticompetitive effects due to the characteristics of the affected markets and of the information exchanged.

8. Total turnover 2014 (million €) Fine as % of total turnover
Fines
Company
Total turnover 2014 (million €)
Fine as % of total turnover
Total fine (million €)
CITROËN ESPAÑA
1,136.08
1.30%
14.77
B&M ESPAÑA (MITSUBISHI)
119.39
0.65%
0.78
BMW IBÉRICA
1,147.40
0.70%
8.03
CHEVROLET ESPAÑA.
13.86
1.00%
0.14
CHRYSLER ESPAÑA
0.04
0.25
FIAT SPAIN
580.69
1.20%
6.97
FORD ESPAÑA
6,744.94
0.30%
20.23
GENERAL MOTORS ESPAÑA
967.25
0.60%
22.83
HONDA MOTOR EUROPE (Opel)
203.11
0.61
HYUNDAI MOTOR ESPAÑA
464.75
0.95%
4.42
KIA MOTORS IBERIA
414.84
0.50%
2.07
MAZDA AUTOMÓVILES ESPAÑA
218.80
0.66
MERCEDES BENZ ESPAÑA
2,379.33
0.10%
2.38
NISSAN IBERIA
287.06
1.10%
3.16
PEUGEOT ESPAÑA
1,209.43
15.72
RENAULT ESPAÑA
1,516.95
18.20
TOYOTA ESPAÑA
824.48
1.05%
8.66
VOLVO CAR ESPAÑA
213.26
0.80%
1.71
TOTAL
22,430.60
131.45

9. Fines
Facilitators: fines imposed given the characteristics of their active participation and key role in the cartel
Company
Total turnover 2014 (million €)
Fine as % of total turnover
Total fine (million €)
SNAP-ON BUSINESS SOLUTIONS
2.64 2%
0.05
URBAN SCIENCE ESPAÑA
3.50
0.07
SEAT and subsidiaries exempt from payment of the fine that would have been applied to them as members of the cartel (art. 65 SCA)
Company
Total turnover (million €)
Fine
PORSCHE IBÉRICA
122.60
Exempt
SEAT
1,334.21
VOLKSWAGEN AUDI ESPAÑA (AUDI, SKODA and VW)
2,526.00

10. Confidential/Private
Information exchanges: likelihood of collusive outcomes
Past
Current
Future
Timeliness
Collusive outcome
Aggregated
Disaggregated
Aggregation
Infrequent
Frequent
Frequency
Public
Restricted
Confidential/Private
Access to data
Diapositiva Vera Sopeña + Inmaculada
Third parties
Third related parties
Direct
Through