EU fines Volkswagen and BMW $1 billion for emissions consortium

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Previous groups by applying antitrust law to technical talks, Daimler emerges from fine after whistling at cartel VW considers legal action BMW says innocence of suspected emissions fraud

BRUSSELS (Reuters) – The European Commission imposed a total fine of 875 million euros ($1 billion) on two German carmakers, Volkswagen, on Thursday for their complicity to limit the use of emissions-cleaning technology they had developed.

The case, separate from the so-called “dieselgate” scandal over software designed to cheat vehicle emissions tests, sets a precedent by extending the application of European competition law to technical-level conversations between players in the industry.

In this case, talks held a decade ago focused on design criteria for AdBlue, an additive used to clean nitrogen oxide from exhaust gases produced by diesel cars.

“This is the first time,” EU antitrust chief Margrethe Vestager told a news conference in Brussels. “We’ve never had a cartel whose purpose was to restrict the use of new technology.”

Under the settlement, Volkswagen (VOWG_p.DE) will pay a fine of 502 million euros and BMW (BMWG.DE) 373 million euros. Daimler, also part of the cartel, was not fined after its existence was revealed.

Vestager said German automakers, which included units Volkswagen, Audi (AUDVF.PK) and Porsche (PSHG_p.DE), had the technology to reduce emissions more than required under EU law, but that they avoided competition to do so.

“Today’s decision is about how legitimate technical cooperation can fail. We do not tolerate that when companies collude,” Vestager said.

The European Union has narrowed the original scope of its investigations to ensure that his accusations are pending.

Is technical collision possible?

Vestager said all parties had agreed to settle the case and “recognized their role in this cartel”.

However, Volkswagen said it was considering whether to take legal action, saying the penalty for technical talks about emissions technology set a questionable precedent. Read more

“The commission is entering a new jurisdiction as it treats technical cooperation for the first time as an antitrust violation,” Volkswagen said, adding that fines were set even though customers were not harmed.

The crux of the carmakers’ complaints is whether setting common technical standards amounts to anti-competitive behavior – or whether it really makes it easier for the industry as a whole to adopt the new technology.

The Commission said in a 2019 indictment that German automakers colluded to limit the size of AdBlue tanks between 2006 and 2014, making the urea-based additive less convenient to use.

BMW indicated in its defense that it was cleared of the suspicion of using illegal “defeat devices” to cheat emissions tests. Read more

“This confirms that there has been no allegation of unlawful manipulation of emissions control systems by the BMW Group,” BMW said in a statement.

In the Dieselgate scandal, Volkswagen admitted the use of such devices was a defeat, resulting in more than 32 billion euros ($38 billion) in car refurbishment, fines and legal costs for the Wolfsburg-based automaker.

(1 dollar = 0.8460 euros)

Editing by John Chalmers, Douglas Busvin, Maria Sheehan, Elaine Hardcastle

Our Standards: Thomson Reuters Trust Principles.

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