The European Commission (EC) has fined the German carmakers BMW and Volkswagen Group a fine of 875 million euros for forming a cartel. The car manufacturers, which also include the Mini, Audi and Porsche brands, have admitted that they have mutually agreed on nitrogen oxide emissions in new diesel cars. While there was a technique available to reduce those emissions, they didn’t take full advantage of it to avoid competing with each other. The EC announced this on Thursday.
It is the first time that the EC has penalized technical agreements on competition. According to the EC, the car manufacturers have had regular technical meetings over the course of five years to discuss the development of the so-called Selective Catalytic Reduction (SCR) technology. By injecting a mixture (so-called AdBlue) into the gas exhaust of diesel cars, nitrogen oxide emissions would be eliminated. The car manufacturers consciously decided not to do more than what was legally stipulated together. BMW must pay a fine of 372 million euros and the Volkswagen Group (Volkswagen, Audi and Porsche) 502 respectively.
Daimler, the parent company of Mercedes, has also been found guilty of cartel formation, but will avoid a fine – of around 727 million euros, according to the EC – because the company confessed to the agreements in Brussels. According to the Commission, Daimler, BMW, Volkswagen, Audi and Porsche had technology to reduce harmful emissions well below the legal limit, but this did not happen. European Commissioner Margrethe Vestager of Competition states that it is unacceptable for companies to collude in this way. She says it is “essential” that companies compete and innovate when it comes to controlling pollution from the automotive industry. Only then can the European Union meet the goals of making Europe climate neutral by 2050, according to the European Commissioner. “We will not tolerate it when companies collude.”
The car industry also received bad news in 2015 after the American environmental agency EPA accused the German manufacturer Volkswagen of serious fraud with harmful nitrogen oxides. An investigation revealed that the car manufacturers used various instruments and software to manipulate the emission measurements. The cars thus appeared to meet European pollution standards, when in reality they emitted far above the legal amount of nitrogen.
The scandal, also known as the ‘dieselgate’, spread to other major car brands in the years that followed. For example, the French justice raided Renault and PSA. Italian-American automaker Fiat Chrysler was accused of fraud in 2017. The company has now paid approximately 800 million euros in settlements and several criminal investigations are still ongoing. The most recent raids were carried out by the German police at the beginning of last year. The police raided ten locations of the Japanese car maker Mitsubishi, again in connection with software tampering. Billions of euros in fines have now been imposed. (NRC)
A version of this article also appeared in NRC in the morning of July 9, 2021