Volkswagen & BMW Colluded To Delay Clean Vehicles

In a press release this week, the European Commission announced that it found Daimler, BMW, and Volkswagen Group — which includes Volkswagen, Audi, and Porsche — breached EU antitrust laws from the time period between June 25, 2009, and October 1, 2014.

The automakers are accused of colluding on technical development in the area of nitrogen oxide cleaning. The Commission fined the automakers, with the exception of Daimler since it revealed the existence of the cartel to the Commission, €875,189,000. The press release noted that all parties acknowledge their involvement in the cartel and have agreed to settle the case.

The automakers held regular meetings on developing selective catalytic reduction (SCR)-technology. This technology eliminates nitrogen oxide emissions from diesel passenger cars through the injection of urea, also known as AdBlue, into the exhaust gas stream. However, these meetings weren’t about lowering emissions.

Instead, these meetings were part of collusion that spanned over 5 years to avoid competition on cleaning better than what was required by law — even though there was technology available. The Commission stated that Daimler, BMW, and Volkswagen Group agreed on AdBlue tank sizes and ranges and had a common understanding of the average estimated AdBlue consumption.

They also shared commercially sensitive data on these elements, which removed uncertainty about their future market conduct concerning NOx emissions cleaning beyond and above the legal requirements. In other words, they restricted competition on product characteristics relevant to the customers.

The Commission stated that the conduct constituted an infringement by object in the form of a limitation of technical development, a type of infringement explicitly referred to in Article 101(1)(b) of the Treaty and Article 53(1)(b) of the European Economic Area (EEA)-Agreement.

Executive Vice-President of the Commission, Margrethe Vestager, in charge of competition policy, said:

“The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards. But they avoided to compete on using this technology’s full potential to clean better than what is required by law. So today’s decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude. It is illegal under EU Antitrust rules. Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

The Hill reported that Volkswagen said in response that it’s considering taking legal action against the fine imposed by the Commission. Volkswagen said:

“The Commission is entering new judicial territory because it is treating technical cooperation for the first time as an antitrust violation.”

Volkswagen will pay the largest portion of the fine, €502,362,000. BMW will pay €372,827,000.

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