EU Commission opens formal investigation into possible cartel activity between BMW, Daimler and the VW group on clean emission technology

EPA

A composite image made of file images shows the logos of German carmakers (clockwise from top L) Porsche, Volkswagen (VW), Audi, Mercedes, and BMW.

EU Commission opens formal investigation into possible cartel activity between BMW, Daimler and the VW group on clean emission technology


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The European Commission has decided to open an investigation into the possible creation of an illegal cartel between car manufacturers BMW, Daimler – Mercedes Benz, Volkswagen, Audi, and Porsche – a group commonly known as” the circle of five” – who, according to the Commission, colluded on clean emissions technologies.

“If proven, this collusion (by the five companies in question) may have denied consumers the opportunity to buy less polluting cars despite the technology being available to the manufacturers,” said Margrethe Vestager, the European Commissioner for Competition as the EU executive announced the opening of the investigation.

According to information about the investigation and released by the Commission, Brussels seems concerned that the deployment of emissions limiting technologies may have been hampered by meetings between BMW, Daimler (which owns Mercedes Benz) and the VW Group (the owners of Volkswagen, Audi and Porsche). Investigators are particularly concerned that the development and rollout of “Selective Catalytic Reduction” systems for diesel engines and “Otto Particulate Filters” for petrol engines may have been affected by the cartel’s actions.

 German weekly Der Spiegel first reported on the possible formation of a cartel in 2017 when it reported that the five companies had forged a secret agreement in the 1990s, which included plans to collude with one another on issues concerning technology, costs, suppliers, and exhaust gas purification of diesel vehicles.

According to the Commission, its formal investigation only concerns the emissions control systems, which have no connection between this scandal and the Commission’s decision to open the investigation.

Numerous other technical topics have been discussed as part of the investigation, according to the EU executive, including common quality requirements for car parts and quality testing procedures, as well as exchanges concerning the group’s own car models that were already on the market.

Investigators have reportedly looked into allegations that the companies had discussions about the maximum speed at which the roofs of convertibles can open or close, and at which speed the cruise control will work.

The Commission believes that there are no sufficient indications that these discussions constituted the sort of anti-competitive conduct that would merit further investigation as the bloc’s antitrust rules leave room for technical cooperation aimed at improving product quality.

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