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April 5, 2019

EU accuses BMW, Daimler and VW over emissions technology

The European Commission has accused BMW, Daimler and VW of breaching EU antitrust rules from 2006 to 2014 by colluding to restrict competition on the development of petrol and diesel emissions control technology for passenger cars.

By Olly Wehring

The European Commission has accused BMW, Daimler and VW of breaching EU antitrust rules from 2006 to 2014 by colluding to restrict competition on the development of petrol and diesel emissions control technology for passenger cars.

This is just a preliminary shot across the automakers' bows.

"If, after the parties have exercised their rights of defence, the commission concludes that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of a company's annual worldwide turnover, the EC said in a statement.

"There is no legal deadline for the commission to complete antitrust inquiries into anticompetitive conduct."

Commissioner Margrethe Vestager in charge of competition policy said: "Companies can cooperate in many ways to improve the quality of their products. However, EU competition rules do not allow them to collude on exactly the opposite: not to improve their products, not to compete on quality.

"We are concerned that this is what happened in this case and that Daimler, VW and BMW may have broken EU competition rules. As a result, European consumers may have been denied the opportunity to buy cars with the best available technology. The three car manufacturers now have the opportunity to respond to our findings."

The commission's "preliminary view" is BMW, Daimler and VW participated in a collusive scheme, in breach of EU competition rules, to limit the development and roll-out of emission cleaning technology for new diesel and petrol passenger cars sold in the European Economic Area (EEA). This collusion occurred in the framework of the car manufacturers' so-called 'circle of five' technical meetings.

The commission argues BMW, Daimler and VW coordinated their AdBlue dosing strategies, tank size and refill ranges between 2006 and 2014 with the common understanding that they thereby limited AdBlue consumption and exhaust gas cleaning effectiveness.

It also claims the three coordinated to avoid, or at least to delay, the introduction of Otto Particle Filters (OPF) in new, direct injection, petrol passenger car models between 2009 and 2014 and to remove uncertainty about their future market conduct.

"The commission's preliminary view is that the car manufacturers' behaviour aimed at restricting competition on innovation for these two emission cleaning systems and in doing so, denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers," the EC said.

"Such market behaviour, if confirmed, whilst not entailing price fixing or market sharing, would violate EU competition rules prohibiting cartel agreements to limit or control production, markets or technical development…"

In October 2017, the commission carried out inspections at the premises of BMW, Daimler, Volkswagen and Audi in Germany, as part of its initial inquiries. It opened an in-depth investigation in September 2018.

BMW said in a statement: "The [group] will examine the objections and information provided by the European Commission and submit a reply to the authority. Since this matter concerns ongoing proceedings of the European Commission, the company will not comment on the content of the objections at this time. The [group's] review of the statement of objections and any resulting potential financial impact is ongoing.

"The [group] regards these proceedings as an attempt to equate permissible coordination of industry positions regarding the regulatory framework with unlawful cartel agreements."

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