Volkswagen and BMW fined $1 bn for restricting competition in emission cleaning

The European Union has slapped Volkswagen and BMW with a whooping fine of $1 billion for restricting competition in emission cleaning for new diesel passenger cars. It said Daimler AG, BMW and Volkswagen colluded on the technical development in the area of nitrogen oxide cleaning, thus breaching EU antitrust rules.

Margrethe Vestager, EU antitrust chief, told a news conference in Brussels that this is a first. “We have never had a cartel whose purpose was to restrict the use of novel technology.” Vestager said the German carmakers, which included VW units Audi and Porsche, 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.”

Volkswagen, under a settlement, will pay a fine of 502 million euros and BMW 373 million euros. However, Daimler, which was also part of the cartel, was not fined. Vestager said all of the parties had agreed to settle the case and have acknowledged their role in this cartel.

But Volkswagen is considering legal action. It said 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.” The carmaker said fines had been set even though no customers had suffered any harm.

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BMW noted 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 BMW Group,” the carmaker said in a statement.

The Commission, in its 2019 charge sheet, had stated 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 said discussions on the AdBlue tanks had no influence whatsoever on the company’s product decisions. The carmaker said it was significant that the final notice found there was no collusion involving earlier allegations of using software to restrict AdBlue dosing.