European Commission imposes €875 million fine on BMW and Volkswagen
The European Commission alleged that German automakers BMW, Daimler, and the Volkswagen Group (Volkswagen, Audi, and Porche) violated EU antitrust laws by colluding to restrict the deployment of cleaner emissions technology in diesel passenger cars. The Commission imposed a fine of €875 million on BMW and the Volkswagen Group.
The automakers held frequent technical meetings to review the development of technology to remove hazardous nitrogen oxide emissions from diesel passenger cars. During these meetings, however, the automakers colluded to prevent competition on cleaning emissions better than what the law required, although they had the requisite technology. By agreeing on the size of the AdBlue tank and exchanging commercially sensitive information, the automakers resolved the ambiguity about their future market behavior, which is related to reducing nitrous oxide emissions.
The automakers concentrated on limiting technological development rather than pricing, market sharing, or customer allocation. Therefore, it is a novel legal ground because this is the first time that the Commission concluded that collusion on technological development constitutes a cartel. Executive Vice-President of the Commission said, “This decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”
The Commission’s investigation into this issue began with Daimler applying the 2006 Leniency Notice. As part of its initial investigation into suspected collusion between automakers, the Commission conducted inspections at the facilities of BMW, Daimler, Volkswagen, and Audi in Germany in October 2017. Subsequently, in September 2018, the Commission started an in-depth investigation against the five automakers, also known as the “Circle of Five.” Ultimately, in February 2021, the Commission initiated the process to settle the dispute since all the parties admitted their involvement in the cartel.
While the Commission imposed a fine of €502 million and €373 million on the Volkswagen Group and BMW respectively, Daimler received complete immunity under the 2006 Leniency Notice for disclosing the cartel’s existence to the Commission.