EU fines German car cartel €875M over clean emissions technology


EU Executive Vice President Margrethe Vestager today slapped German carmakers with an €875 million fine for conspiring to limit the development of clean emissions technology.

Between 2009 and 2014, BMW, VW (Volkswagen, Audi and Porsche) and Daimler used so-called "circle of five" technical meetings to agree to hold back on technological innovations that could reduce harmful nitrogen oxide gases of diesel cars, Vestager said in a statement.

VW will need to pay the bulk of the penalty, €502 million, despite being granted a 45 percent reduction for having cooperated with the investigators. BMW is fined the remaining €373 million. Daimler got total immunity as it was the first participant in the cartel to denounce its existence.

“The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions ... but they avoided to compete on using this technology's full potential to clean better than what is required by law," Vestager said in a statement.

The decision comes just before the European Commission will announce an important batch of legislative proposals to advance the EU Green Deal.

While Vestager’s focus as a competition commissioner is to ensure fair competition between companies, the fine for Germany’s powerful car makers is a strong message to industry that she will not hesitate to use her powers to pursue green objectives.

"Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives," Vestager said, adding that "this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

Cartels usually conspire to fix prices. The Commission said this is the first time that it has concluded that collusion on technical development amounts to a cartel, a type of collusion cited in the EU treaties.The Commission wrote a letter to the carmakers to give guidance on what type of discussions competitors are allowed to have — including discussions on standard-setting and joint positions on legislation.

“One is allowed to lobby,” Vestager said, adding that the guidance would be made public with the decision once the Commission has cleared confidential parts of the text. “When this letter will become public, it will also work as a guidance for companies that are not in this cartel,” she said.

The Commission decided not to pursue some of the original charges against the companies, according to which they coordinated “to avoid, or at least to delay” the introduction of a new type of filter in petrol cars. Brussels said the "evidence was insufficient" to prove this part of its case.

BMW noted that the Commission "dropped most of its charges of antitrust violations" in the case. "With the withdrawal of most of the original allegations, the Board of Management of BMW AG has agreed to a settlement proposed by the European Commission that will bring these proceedings to an end," the company said in a statement.

VW said it "will carefully review today's decision" and decide whether to appeal, according to a statement.  

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