BMW, VW, Daimler Accused of Colluding to Block Emissions Controls

The EU has sent a letter to BMW, Daimler, and Volkswagen, informing all three companies that it believes they colluded to limit the development of technology to control diesel emissions from 2006 – 2014. This is entirely separate from the issues related to the defeat devices installed on VW cars over much of the same time period. The letter states that the alleged collusion is being investigated as a violation of competition law, not environmental law.

According to the letter, the EU believes these three companies colluded not to bring different diesel treatment options to market. Currently, diesels inject urea (AdBlue) into the exhaust gas stream. The EU writes that “In the Commission’s preliminary view, BMW, Daimler, and VW coordinated their AdBlue dosing strategies, AdBlue tank size, and refill ranges between 2006 and 2014 with the common understanding that they thereby limited AdBlue-consumption and exhaust gas cleaning effectiveness.”

The companies also stand accused of colluding not to introduce ‘Otto’ particle filters. These reduce harmful particle emissions from exhaust. The letter states that “In the Commission’s preliminary view, BMW, Daimler, and VW coordinated to avoid, or at least to delay, the introduction of OPF in their new (direct injection) petrol passenger car models between 2009 and 2014, and to remove uncertainty about their future market conduct.”

Taking these actions harmed consumers, the EU letter states, by denying them the right to buy less-polluting cars. One of the facts that emerged from the VW debacle was that EU groups had suspected companies were flouting diesel regulations for years, paying lip service to the idea of improving pollution but not actually hitting the milestones they claimed to be. While I can’t speak to how diesels were positioned in Europe, VW leaned on ‘green’ marketing in its messaging for diesel vehicles in the United States.

While these efforts don’t involve price-fixing or illegally dividing a market between different companies, they may still violate EU law on cartel activities. It is illegal to make agreements in the EU that would limit or control production, markets, or technical developments. Cooperation that results in an improved final product through the sharing of technical know-how is explicitly permitted.

It was Daimler that informed the EU about the collusion in the first place, Reuters reports, which would seem to cast the EU’s letter in a more serious light. If Daimler, BMW, and VW were colluding to keep cleaner technology off the market at the same time VW was actively cheating and shipping all of its diesel vehicles with defeat devices, it would indicate a profound level of bad faith from automotive manufacturers for nearly a decade. The VW scandal may be a bit in the rearview mirror, but it hasn’t entirely retreated from public memory.

If found guilty, the EU could impose a fine as high as 10 percent of global turnover (total revenue).

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