Bonnet blown off 15 year Italian car financing cartel with highest ever Italian fine

On 20 December 2018, the Italian Competition Authority ("ICA") concluded its investigation into a cartel concerning car financing products. The ICA found that the parties had been exchanging sensitive information on current and future quantities and prices over a 15 year period. The fines imposed totalled €678 million, the highest fine ever imposed by the ICA.

Following a leniency application filed by Daimler AG and Mercedes Benz Financial Services Italia S.p.A., the ICA decided to investigate whether so called "captive banks" linked to car manufacturers had exchanged sensitive commercial information in violation of competition law.

The ICA found that a group of captive banks, acting through their trade associations, had regularly exchanged commercially sensitive information which was not publicly available on a range of strategic matters, including future interest rates, other fees charged to consumers and the cost of financing.

The ICA considered that the type of data exchanged was sufficiently sensitive to give rise to a violation of competition law by object by the relevant captive banks.

Interestingly, the ICA considered that the parent companies of FCA Bank and Banca PSA Italia (which were essentially autonomous joint ventures) were liable for the conduct of their respective joint ventures. However, since the ICA was applying this parent liability principle for the first time, the parent companies of FCA Bank and Banca PSA Italia were not fined.

The amount of fines imposed, nearly €678 million, is the highest fine ever imposed by the ICA. This is in part due to the fact that the infringement continued over a 15 year period.  We understand that the ICA, in applying its current fining guidelines, initially calculated much higher fines.  However, that a reduction of approximately 80% was applied on proportionality grounds in the light of the relationship between the vehicle financing costs and the purchase price of a vehicle.  

Of particular note is that a 10% reduction was granted to companies that had adopted an antitrust compliance programme prior to the launch of the investigation and had further integrated those programmes following the start of the proceedings. This follows on from the FCA's recent guidelines which set how compliance programmes can be designed to benefit from fine reductions (see our article of November 2018).

The leniency applicants were awarded the benefit of full immunity from sanctions, thus avoiding a fine exceeding €60 million. 

Most of the fine recipient have announced their intention to appeal the decision.

Companies should take note that this case:

• is one of the few cases in which the ICA has been able to rely on a leniency application in a "cartel" investigation;
• confirms the ICA's developing approach to parental liability in antitrust cases; and
• is a reminder of the importance of maintaining a competition compliance programme and the fact that the implementation of such programmes may be rewarded with reduced fines.

With thanks to Sabina Pacifico of Ashurst for her contribution