German Automakers Fined Over Emissions Technology Collusion

The European Union has decided to fine several German automakers over illegally conspiring to restrain the advancement of clean-emissions technology.

According to a statement published by the European Commission, the EU’s antitrust chief Margrethe Vestager has imposed a $590 million fine on Volkswagen and its Audi and Porche divisions, while BMW has been ordered to pay $442 million. The fines were issued in response to “cartel behaviour,” given that the companies in question had the technological means to reduce harmful emissions, but deliberately averted competition and denied consumers the option to purchase more environmentally-friendly vehicles.

Daimler, the maker of Mercedes Benz, avoided a financial penalty because it informed on its co-conspirators. The European Commission found that although the automakers did not conspire to create illicit emissions-cheating technology, they did illegally collude to deploy emissions technology that only adhered to minimum environmental standards, and was not as efficient as it could have been.

“For over five years, the car manufacturers deliberately avoided to compete on cleaning better than what was required by E.U. emission standards,” explained Vestager. “And they did it despite the relevant technology being available.” She added that, between 2009 and 2014, officials from the five automakers attended a series of so-called ‘circle of five’ meetings, where they agreed to not move forward with technological advancements that would helped cut back the harmful nitrogen oxide gas emissions.

The European Commission found that the German carmakers agreed to reduce the size of the tank used to hold AdBlue, a chemical that neutralizes the nitrogen oxide in diesel emissions. Instead of affixing larger tanks into the vehicles— which would have helped cut pollution even more— the automakers preferred to use the extra space for speakers and other amenities.

“They knew that they had the technical possibility to clean better than required by law and compete on this important parameter relevant for consumers. 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,” said Vestager.

Information for this briefing was found via the European Commission. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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