BRUSSELS. The EU Antitrust has imposed a fine of over 875 million euros on BMW, Daimler and Volkswagen for having made a cartel by hindering the development and full use of non-polluting technologies to reduce emissions from diesel cars. The same Antitrust communicates it.
The case concerned the ‘circle of five’, namely BMW, Daimler and three divisions of the Volkswagen group, namely VW, Audi and Porsche. By reporting the irregular practice to the Commission, Daimler avoided the sanction.
EU Competition Manager Margrethe Vestager explained that “the five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what is legally required by EU emission standards, but have avoided competing by not using the full potential of this technology to go beyond what is required by law. So today’s decision is about how legitimate technical cooperation didn’t work. Competition and innovation in car pollution management are essential for Europe to achieve our ambitious Green Deal goals. And this decision shows that we will not hesitate to take action against all forms of cartel conduct that jeopardize this objective ».
The car manufacturers in question, Brussels reconstructs, held regular technical meetings to discuss the development of selective catalytic reduction, a technology that eliminates harmful nitrogen oxide (NOx) emissions from diesel cars through urea injection (also called ‘AdBlue ») In the exhaust gas flow. During these meetings, and for more than five years, carmakers have worked together to avoid competition in this area to make the “cleaning” action better than required by law even though the relevant technology was available.
In particular, Daimler, BMW and the Volkswagen group have reached an agreement on the sizes and ranges of AdBlue tanks and a common understanding on the estimated average consumption of AdBlue. They also exchanged commercially sensitive information on these elements and removed the uncertainty about their future market conduct regarding the cleaning of NOx emissions beyond and above the legal requirements (the so-called ‘over-fulfillment’) and ranges of AdBlue refill. ‘This means that they have limited competition on product characteristics relevant to customers: such behavior constitutes an infringement in the form of a limitation of technical development.’
The unlawful conduct runs from 25 June 2009 to October 2014. In setting the level of the fines, the Commission took into account the value of the sales of the diesel car parts equipped with the systems concerned in the European Economic Area in 2013 (last full year of the infringement), the gravity of the infringement and the geographical location of the purpose. A further reduction was applied to all parties as this is the first cartel ban decision based solely on a restriction of technical development and not on pricing, market sharing or customer allocation.
The amount of the 20% reduction takes into account the fact that this type of behavior is expressly prohibited. The Commission applied a 10% reduction in the fines of all parties under the 2008 Settlement Notice in consideration of the recognition of their participation in the cartel and their liability in that breach.
This ‘cartel’ investigation is separate and distinct from other investigations, Brussels points out, including those by prosecutors and other authorities into car manufacturers and the use of illegal manipulation devices to evade regulatory testing. There are no indications that the parties have coordinated the use of illegal manipulation devices to evade regulatory testing. In these cartel proceedings, the Commission did not determine whether car manufacturers met the emission standards of cars or ‘cleaned’ to a higher standard than required.
This is the first time that the Commission concludes that collusion on technical development amounts to a ‘cartel’. In April 2019, the Commission adopted a statement of objections in the ordinary procedure against Daimler, BMW and the Volkswagen group regarding their technical cooperation on the development of relevant systems for new diesel passenger cars and on Otto Particulate Filters (OPF) to reduce harmful particles exhaust gas emissions of new direct injection petrol cars. In February 2021, the lawsuit moved from the ordinary procedure to the settlement procedure. The Commission decided not to investigate further the OPF aspect of the case as it felt that the evidence was insufficient to prove a breach