Germany’s Biggest Automakers Fined €875 Million For Emissions Collusion

Attempts to harness diesel emissions have embarrassed the German auto industry yet again, with the European Commission (EC) delivering a stinging antitrust rebuke of BMW, Audi, Volkswagen, Porsche and Daimler today.

The EC, the administrative arm of the EU, fined BMW, Audi, Porsche and Volkswagen €875,189,000 for illegally colluding to restrict competition on emission-cleaning equipment for diesel engines.

All five automakers admitted their guilt, though Daimler escaped a €727 million financial penalty because it was first to blow the whistle on the collusion to the EC investigators.

Volkswagen’s €502 million fine was 45% less than it would have been had the automaker not also come forward early with details of the collusion.

BMW took the full force of the penalty (minus a 10% discount for settling the case), with a €373 million fine for its role in the collusion scandal, which the EC painted as a technical cooperation turned bad.

The EC found they’d limited technical development, in breach of its Article 101(1)(b) of the Treaty and Article 53(1)(b) of the European Economic Area (EEA)-Agreement, in actions taken between June 25, 2009 and October 1, 2014.

The core of the findings was that the automakers colluded to agree on AdBlue tank sizes and ranges, and negotiated a common understanding of AdBlue consumption.

Injecting urea (AdBlue) into the stream of diesel exhaust gases lowers the nitrogen oxide (NOx) levels entering the atmosphere.

They held regular meetings to collude on the development of selective catalytic reduction (SCR) technology and their diesel emissions-cleaning targets, freezing more effective emissions-cleaning technologies out of the market.

 “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,” the EC Executive Vice-President of in charge of competition, Margrethe Vestager, insisted.

“But they avoided to compete on using this technology’s full potential to clean better than what is required by law.

“So today’s decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude. It is illegal under EU Antitrust rules.

“Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

There were parts of the technical cooperation that lead to useful advances, and were not illegal, such as the standardization of the AdBlue filler neck, AdBlue quality standards and AdBlue dosing software.

The finding was the 36th EU settlement for collusion since 2008 and the penalties will find their way into general EU expenditures.

The EC also insisted that the penalties and the investigation were not related to emissions-cheating “defeat device” investigations that remain ongoing.

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