Volkswagen and BMW fined $1 billion for running emissions cartel

Business

CNN 08 July, 2021 - 10:39am 22 views

Updated 11:39 AM ET, Thu July 8, 2021

Read full article at CNN

EU slaps VW, BMW with 875-mn-euro antitrust fine | AFP

AFP News Agency 08 July, 2021 - 11:18am

EU fines BMW and VW $1 billion for limiting emissions reduction tech | Engadget

Engadget 08 July, 2021 - 08:29am

BMW, Daimler and VW reached a deal on AdBlue tank sizes, ranges, and average consumption, and even shared "sensitive" technical details with each other, the Commission claimed. This reportedly halted competition and stopped the trio from realizing the "full potential" of their emissions-reducing tech. They might have cleaned diesel output beyond EU requirements, but apparently chose not to.

All three have agreed to settle the case. Daimler had been facing a €727 million ($861.5 million) fine if it hadn't disclosed the behavior. VW also received leniency for its level of cooperation.

Commission Executive VP Margrethe Vestager noted that this was a novel case — it was the first time the regulator determined that collusion on technical development produced an illegal cartel. To that end, officials offered guidance on cooperation that wouldn't run afoul of antitrust rules, such as developing a unified AdBlue software system.

That pioneering conclusion might cause problems, however. VW said in a statement that it was considering a possible appeal against the fine for allegedly setting a dangerous precedent in unfamiliar territory. The automaker also maintained that the substance of the discussions was "never implemented" and that customers never suffered as a consequence. It's not certain VW would succeed with an appeal, but the fight could be far from over.

Please enter a valid email address

German carmakers fined over emissions 'cartel'

BBC News 08 July, 2021 - 07:52am

Daimler, which was part of the talks but blew the whistle on them, escaped without a fine.

The companies had agreed not to implement more than basic EU standards, the Commission said.

However, VW said that the contents of the discussions were not implemented, and that customers were not harmed.

The carmaker said it was considering appealing against the decision.

This type of fine is a first for the European Commission, which normally imposes competition penalties for price fixing and market sharing, rather than technical cooperation.

The Commission said BMW, Daimler and three VW group brands - Audi, Porsche, and VW - had "illegally colluded to restrict competition" in diesel emissions cleaning.

Specifically, it said the firms had regular meetings for five years on how to reduce emissions of nitrogen oxide, an exhaust gas harmful to people and the environment.

The firms developed 'AdBlue', a liquid additive to turn nitrogen oxide into harmless water and nitrogen.

However, while the carmakers knew that injecting more AdBlue into streams of exhaust gas could lead to more effective cleaning, they indicated to each other that none of them would aim above the minimum legal standards, the Commission said.

They agreed on sizes of AdBlue tanks and ranges, and exchanged sensitive information on planned tank sizes and AdBlue consumption in future models, it added.

"In today's world, polluting less is an important characteristic of any car," the Commission said. "And this cartel aimed at restricting competition on this key parameter."

VW said the Commission was "imposing fines even though the contents of the talks were never implemented and customers were therefore never harmed."

It said the tank sizes and ranges that were put into cars were two to three times higher than those discussed.

"The Commission is breaking new legal ground with this decision, because it is the first time it has prosecuted technical cooperation as an antitrust violation," a spokesman said.

Instead of a fine it would have been better for the car industry if the European Commission had "issued clear guidelines describing how cooperation in research and development can be structured in a way that complies with antitrust law", VW added.

"The large fines imposed in this case underscore the need for more comprehensive practical guidance from the Commission to ensure that legal uncertainties do not become a stumbling block to innovation in Europe," the carmaker said.

"Volkswagen will carefully review today's decision once served and then decide whether to appeal, if necessary," it added, saying that it has until mid-September to bring any action before the European Court in Luxembourg.

The case is separate to the so-called "dieselgate" emissions-cheating scandal.

BMW said the Commission had cleared it of suspicion of using illegal "defeat devices" to cheat emissions tests.

"This underlines that there has never been any allegation of unlawful manipulation of emission control systems by the BMW Group," BMW said.

A manhunt is still under way following the killing of President Jovenel Moïse on Wednesday.

15 sayings from around the world

EU fines BMW and Volkswagen $1 billion over diesel emissions tech collusion

Autoblog 08 July, 2021 - 07:22am

This page is for personal, non-commercial use. You may order presentation ready copies to distribute to your colleagues, customers, or clients, by visiting http://www.autobloglicensing.com

BRUSSELS — The European Commission said on Thursday three German carmakers breached EU antitrust rules by restricting competition in emission cleaning for new passenger diesel cars, fining BMW and Volkswagen Group a total of 875 million euros ($1 billion).

The EU executive said the trio had colluded on technical development in the area of nitrogen oxide cleaning, but Daimler was not fined because it revealed the existence of the cartel.

"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," said EU antitrust chief Margrethe Vestager.

"So today's decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude."

Volkswagen said it was considering whether to take legal action against the fine, saying the penalty over technical talks about emissions technology with other carmakers set a questionable precedent.

"The Commission is entering new judicial territory, because it is treating technical cooperation for the first time as an antitrust violation," the German carmaker said after being fined 502 million euros.

"Furthermore it is imposing fines, although the content of the talks was never implemented and no customers suffered any harm as a result," Volkswagen added in a statement.

BMW agreed to the settlement proposed by the European Commission, paying a 373 million euro fine, saying it had been cleared of suspicion of using illegal 'defeat devices' to cheat emissions tests.

"This underlines that there has never been any allegation of unlawful manipulation of emission control systems by the BMW Group," the company said in a statement.

Please sign in to leave a comment.

2022 BMW 2 Series is bigger, more powerful, has a normal grille

2022 Honda Civic Review | Same greatness, way more style

Ineos Grenadier's interior is an exercise in function-over-form design

Lamborghini sends off the Aventador with a stunning grand finale

2022 Lotus Emira revealed with two engine options, Evija-inspired looks

This Dodge Charger pickup is like a modern-day El Camino, and it could be yours

We get it. Ads can be annoying. But ads are also how we keep the garage doors open and the lights on here at Autoblog - and keep our stories free for you and for everyone. And free is good, right? If you'd be so kind as to allow our site, we promise to keep bringing you great content. Thanks for that. And thanks for reading Autoblog.

You still haven't turned off your adblocker or allowed our site. It only takes a few seconds.

You must be logged in to perform that action.

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

POLITICO Europe 08 July, 2021 - 04:24am

Daimler, BMW, Volkswagen, Audi and Porsche colluded to avoid using technology’s full potential, Vestager says.

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.”

“Producers should be allowed to agree they will do better than the law requires when there are not enough incentives to ‘overachieve’ independently,” said Maurits Dolmans, a competition lawyer at Cleary Gottlieb. “But they should not agree limits to how much they overachieve, and should not agree on how they clean up their act,” he 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.  

Carmakers are racing to go electric, but the European Commission is holding them to account for past sins in dodging EU rules.

In the beginning it was Paris’ idea. And it is still only Paris’.

EU and US competition chiefs hold virtual meeting Friday after Khan’s appointment as FTC head last month.

Nissan pledge means EU and UK are now on parallel tracks when it comes to boosting batteries.

Forgot your password? Click here.

By logging in, you confirm acceptance of our POLITICO Privacy Policy.

EU fines German car makers €875MILLION over emission collusion

This is Money 08 July, 2021 - 04:13am

By Rob Hull For Thisismoney.co.uk

The European Union issued €875million (around £732million) in fines to major German car manufacturers after for colluding to curb the use of emissions cleaning technology they had developed.

Daimler, BMW and Volkswagen - along with its Audi and Porsche divisions - avoided competing on technology to restrict pollution from gasoline and diesel passenger cars, the EU's executive commission said. 

Daimler, the parent group of Mercedes-Benz, avoided any fines after it revealed the cartel to the European Commission.

Emission cartel fined: Major German car makers were stung with fines with a combined value of €875million (around £732million) after being found to have colluded to not bring emission-reducing technology to the market as soon as possible

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

EU antitrust chief Margrethe Vestager said that even though the companies had the technology to cut harmful emissions beyond legal limits, they resisted competition and denied consumers the chance to buy less polluting cars.

'Manufacturers deliberately avoided to compete on cleaning better than what was required by EU emission standards. And they did so despite the relevant technology being available,' Vestager said. That made their practice illegal, she added.

According to Vestager, the companies agreed on the size of onboard tanks containing a urea solution known as AdBlue that is injected into the exhaust stream to limit pollution from diesel engines, and also on the driving ranges that could be expected before the tank needed refilling. 

A bigger tank would enable more pollution reduction.

Green group Transport & Environment said the EU's verdict is proof that car manufacturers cannot be trusted to put people’s health and the climate before profit 

Vestager said cooperation between companies is permissible under EU rules when it leads to efficiency gains, such as the faster introduction of new technologies. 'But the dividing line is clear: Companies must not coordinate their behavior to limit the full potential of any type of technology,' she said.

Volkswagen said the investigation had ended with a finding that several other forms of cooperation under review were not improper under antitrust law.

'The (EU) Commission is breaking new legal ground with this decision, because it is the first time it has prosecuted technical cooperation as an antitrust violation,' the company said in a statement. 

'It is also imposing fines even though the contents of the talks were never implemented and customers were therefore never harmed.'

Volkswagen said that the tank sizes produced by all the carmakers involved were 'two to three times' bigger than discussed in the talks. It said it was considering an appeal to the European Court of Justice.

EU antitrust chief Margrethe Vestager said that even though the companies had the technology to cut harmful emissions beyond legal limits, they resisted competition and denied consumers the chance to buy less polluting cars 

BMW said that discussions on the AdBlue tanks had 'no influence whatsoever on the company´s product decisions.' The company said it was significant that that the fine notice found there was no collusion involving earlier allegations of using software to restrict AdBlue dosing.

BMW said it set aside €1.4billion (approx £1.2million) based on the commission's initial accusations but reduced the set-aside in May due to more serious allegations in the case not being substantiated.

Green group Transport & Environment said the EU's verdict is proof that car manufacturers cannot be trusted to put people’s health and the climate before profit. 

Daimler, the parent group of Mercedes-Benz, avoided any fines after it revealed the cartel to the European Commission

Julia Poliscanova, senior director for vehicles and emobility at T&E, said: 'Carmakers cannot be trusted to clean up cars. 

'First they cheated on emissions tests, then they colluded to delay cleaner vehicles even though they had the technology. 

'Only an EU target to switch to 100 per cent emissions-free cars by 2035 will be enough to decarbonise by mid-century and avoid climate catastrophe.' 

The case wasn't 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 €30billion (around £26million) in fines and civil settlements and led to the recall of millions of vehicles. 

The Volkswagen vehicles in the scandal did not use the urea tanks but relied on another pollution reduction technology.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

The comments below have not been moderated.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

By posting your comment you agree to our house rules.

Do you want to automatically post your MailOnline comments to your Facebook Timeline?

Your comment will be posted to MailOnline as usual.

Do you want to automatically post your MailOnline comments to your Facebook Timeline?

Your comment will be posted to MailOnline as usual

We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.

You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.

This is Money is part of the Daily Mail, Mail on Sunday & Metro media group

Volkswagen weighs appeal against EU fine over emissions tech collusion

Reuters 08 July, 2021 - 04:11am

"The Commission is entering new judicial territory, because it is treating technical cooperation for the first time as an antitrust violation," the German carmaker said after it was fined 502 million euros ($593 million).

"Furthermore it is imposing fines, although the content of the talks was never implemented and no customers suffered any harm as a result," Volkswagen added in a statement.

Volkswagen called for clearer guidelines: "The high fines imposed in this case underscore the need for more comprehensive guidance from the Commission to ensure that legal uncertainty does not hamper innovation in Europe," it said.

Our Standards: The Thomson Reuters Trust Principles.

The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.

The industry leader for online information for tax, accounting and finance professionals.

Information, analytics and exclusive news on financial markets - delivered in an intuitive desktop and mobile interface.

Access to real-time, reference, and non-real time data in the cloud to power your enterprise.

Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.

© 2021 Reuters. All rights reserved

EU fines Volkswagen, BMW $1 bln for emissions cartel

Reuters 08 July, 2021 - 04:07am

The case, separate to the so-called 'Dieselgate' scandal over software designed to cheat on vehicle emissions tests, sets a precedent by extending the application of European competition law to technical-level talks between industry players.

In this case, talks held a decade ago centred on design standards for AdBlue, an additive used to cleanse nitrogen oxide from the exhaust gases produced by diesel-powered cars.

"This is a first," European Union antitrust chief Margrethe Vestager told a news conference in Brussels. "We have never had a cartel whose purpose was to restrict the use of novel technology."

Under a 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 revealing its existence.

Vestager said the German carmakers, which included VW units Audi (AUDVF.PK) and Porsche (PSHG_p.DE), had possessed the technology to reduce harmful emissions more than required under EU law but avoided competing to do so.

"So today's decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude," said Vestager.

The EU had narrowed the original scope of its investigation to ensure its charges stuck.

Vestager said that all of the parties had agreed to settle the case and "have acknowledged their role in this cartel".

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

"The Commission is entering new judicial territory, because it is treating technical cooperation for the first time as an antitrust violation," Volkswagen said, adding that the fines had been set even though no customers had suffered any harm.

The nub of the carmakers' complaints boil down to whether setting common technical standards amounts to anti-competitive behaviour - or whether indeed it makes it easier for an industry as a whole to embrace new technology.

The Commission said in its 2019 charge sheet that the German carmakers had colluded to restrict the size of AdBlue tanks between 2006 and 2014, thus making the urea-based additive less convenient to use.

BMW noted in its defence that it had been cleared of suspicion of using illegal 'defeat devices' to cheat emissions tests.

"This underlines that there has never been any allegation of unlawful manipulation of emission control systems by the BMW Group," BMW said in a statement.

In the Dieselgate scandal, VW admitted to using such defeat devices, leading to more than 32 billion euros ($38 billion) in vehicle refits, fines and legal costs for the Wolfsburg-based carmaker.

Our Standards: The Thomson Reuters Trust Principles.

The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.

The industry leader for online information for tax, accounting and finance professionals.

Information, analytics and exclusive news on financial markets - delivered in an intuitive desktop and mobile interface.

Access to real-time, reference, and non-real time data in the cloud to power your enterprise.

Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.

© 2021 Reuters. All rights reserved

Business Stories

Top Stores