From Lambos To Minivans; German Automakers Colluded To Prevent Better Emissions Tech: EU

The European Union Commission on Friday accused BMW, Daimler and Volkswagen Group of colluding to limit emissions reduction technology in their vehicles, reports Ars Technica. Of note, Volkswagen owns VW, Audi, Porsche, Bentley, Bugatti, Ducati and Lamborghini - which hasn't been Italian for over 30 years.

The commission accused the three manufacturers of coordinating to limit the size and refill ranges of AdBlue tanks on their diesel vehicles made between 2006 and 2014. AdBlue is a urea-based liquid that is injected into exhaust gas to reduce the amount of nitrogen oxides (NOx) that are released during diesel combustion.

The commission also accused the three manufacturers of agreeing to avoid or delay the introduction of "Otto" particulate filters on gas-powered vehicles between 2009 and 2014. -Ars Technica

As part of an investigation launched last September, the EU Commission sent the three German automakers formal Statements of Objections which conclude that their behavior was illegal. 

"Such market behavior, if confirmed... would violate EU competition rules prohibiting cartel agreements to limit or control production, markets or technical development," reads an EU Commission press release. 

As Ars Technica notes, this isn't related to the 2015 Volkswagen Group diesel scandal where it lied to governments about how well its diesel vehicles reduced harmful emissions. Moreover, BMW, Daimler and VW Group are not being accused of violating any environmental laws - rather, the EU Commission says they violated laws pertaining to competition among firms. 

As we noted in 2017, the three German automakers have been holding secret “working groups” since the 1990s, where they would discuss, production costs, suppliers, strategy and – importantly – emissions issues, according to Spiegel.

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It was at these meetings that the companies agreed on the appropriate gas purification standards for their diesel vehicles, thus laying the groundwork for the diesel scandal that has resulted in massive fines for these companies both in Germany and the US. The working groups also selected suppliers, helping to set costs for vehicle components. The ongoing discussions allegedly involved more than 200 employees in 60 working groups in areas including auto development, gasoline and diesel motors, brakes and transmissions.  Talks may have also involved the size of tanks for AdBlue fluid for diesel autos, according to Bloomberg.

The allegations are guaranteed to result in more fines for the automakers, which were just beginning to move on from the diesel emission scandal that rocked the industry.

“These allegations look very serious and would mean more than 20 years of potential collusion,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler told Bloomberg. “There seems to be a never-ending story of bad news about the industry’s bad behavior.”

German authorities first became aware of the problem when they raided Volkswagen’s offices in 2016 searching for evidence that the company sought to rig steel prices. Instead, it found evidence of collusion between German automakers. Two weeks later, VW submitted a voluntary admission to antitrust authorities, as did Daimler in hopes of minimizing penalties.