Auto manufacturers fined for failure to compete to improve emissions
German car manufacturers Porsche, Audi, BMW, and Volkswagen were fined $1 billion by the European Union (EU) on Thursday for restricting competition in emission cleaning for new diesel passenger cars.
All the companies are part of the Volkswagen group. It is the second emissions-related scandal to befall the company since 2015, when it admitted to rigging emissions tests in 11 million vehicles.
The current case is unrelated to the previous scandal, known widely as “dieselgate”, and the company has once again admitted fault, agreeing to settle with the European Commission (EC).
EU antitrust commissioner Vice President Margrethe Vestager said the car manufacturers were deliberate in their failure to compete on emissions cleaning as required.
“The law fixes minimum cleaning standards, which all producers have to respect,” Vestager said. “But it still leaves ample room for manufacturers to compete on doing better than the minimum required.”
The impropriety came to light after Daimler, which is also part of the Volkswagen group, disclosed what was going on to the EC.
Daimler, despite its active role in the collusion, was ultimately granted immunity from fines by the EC thanks to its cooperation.
According to Vestager, the group held regular technical meetings to develop SCR-systems for diesel passenger cars that would meet requirements set by the EU. Doing so enabled them to develop a technology that would reduce nitrogen oxide emissions.
The problem, according to the EC, was the company’s colluded together by not taking full advantage of the technology, opting not to compete to achieve the lowest emissions, as commission rules dictate.
“Carmakers developed together a very good technology but decided not to compete on exploiting it to its full potential,” said Vestager. “By reaching a common understanding to avoid competition on the effectiveness of the SCR-system they breached our competition rules.”
Despite having the ability to further lower emissions, the companies decided to aim for only the minimum standard required by law, according to Vestager.
“They knew that they had the technical possibility to clean better than required by law and compete on this important parameter relevant for consumers,” she said. “Instead, they decided to collude by indicating to each other that none of them would aim at cleaning above the minimum standard required by law.”
The fine was the first ever given by the EC over cooperation on technical elements. The commission has previously handed out fines out for issues such as price fixing and market sharing.