Smoky dual exhaust pipes from a starting diesel car.

EU fines major German car manufacturers over emission control collusion

Image credit: Thorsten Nilson/Dreamstime

The European Union (EU) has slapped fines totalling over £750 million on four major German car manufacturers, saying they colluded to limit the development and rollout of car emission control systems.

According to the European Commission, Daimler, BMW, VW, Audi, and Porsche avoided competing on technology to restrict pollution from petrol and diesel passenger cars.

Daimler was not fined after it revealed the cartel to the European Commission. Meanwhile, all parties acknowledged their involvement in the cartel and agreed to settle the case.

EU antitrust chief Margrethe Vestager said that even though the companies had the technology to cut harmful emissions beyond legal limits, all parties concerned avoided competing and denied consumers the chance to buy less polluting cars.

The Commission said their decision to find the manufacturers was about how legitimate technical cooperation went wrong, stating that the entity does not tolerate collusion between companies.

“It is illegal under EU antitrust rules,” Vestager said. “Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

The car manufacturers held regular technical meetings to discuss the development of the selective catalytic reduction (SCR)-technology which eliminates harmful nitrogen oxide (NOx) emissions from diesel passenger cars through the injection of urea (also called “AdBlue”) into the exhaust gas stream.

During these meetings, and for over five years, the car manufacturers colluded to avoid competition on cleaning better than what is required by law despite the relevant technology being available.

Daimler, BMW, and Volkswagen agreed on AdBlue tank sizes and ranges and a common understanding of the average estimated AdBlue consumption. They also exchanged commercially sensitive information on these elements.

They removed the uncertainty about their future market conduct concerning NOx-emissions cleaning beyond and above the legal requirements (so-called “over-fulfillment”) and AdBlue-refill ranges. This also meant that they restricted competition on product characteristics relevant for the customers.

Under the terms of the settlement, Volkswagen Group (Volkswagen, Audi and Porsche) is fined EUR502.4m (£432m), while BMW must pay EUR372.8m (£320m).

The case was not directly linked to the “dieselgate” scandal of the past decade when Volkswagen admitted that about 11 million diesel vehicles worldwide were fitted with the deceptive software, which reduced nitrogen oxide emissions when the cars were placed on a test machine but allowed higher emissions and improved engine performance during normal driving.

The scandal cost Wolfsburg, Germany-based Volkswagen €30bn (£26bn) in fines and civil settlements and led to the recall of millions of vehicles.

It was the first time the European Commission imposed collusion fines on holding back the use of technical developments, not a more traditional practice such as price-fixing.

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