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The European antitrust authorities announced Thursday it has fined Daimler, BMW and VW nearly $1 billion or R14 billion for colluding on technical development in the area of nitrogen oxide cleaning.

The European Commission said in a statement it has imposed a fine of € 875 189 000. Daimler was not fined, as it revealed the existence of the cartel to the Commission.

All parties acknowledged their involvement in the cartel and agreed to settle the case.

“The five-car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards. But they avoided to compete on using this technology’s full potential to clean better than what is required by law,” Executive Vice-President of the Commission Margrethe Vestager, in charge of competition policy said.

“So today’s decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude. It is illegal under EU Antitrust rules. Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

The car manufacturers held regular technical meetings to discuss the development of the selective catalytic reduction (SCR)-technology which eliminates harmful nitrogen oxide (NOx)-emissions from diesel passenger cars through the injection of urea (also called “AdBlue”) into the exhaust gas stream. During these meetings, and for over five years, the car manufacturers colluded to avoid competition on cleaning better than what is required by law despite the relevant technology being available.

More specifically, Daimler, BMW and Volkswagen group reached an agreement on AdBlue tank sizes and ranges and a common understanding on the average estimated AdBlue-consumption. They also exchanged commercially sensitive information on these elements. They thereby removed the uncertainty about their future market conduct concerning NOx-emissions cleaning beyond and above the legal requirements (so called “over-fulfilment”) and AdBlue-refill ranges.

This means that they restricted competition on product characteristics relevant to the customers.

That conduct constitutes an infringement by an object in the form of a limitation of technical development, a type of infringement explicitly referred to in Article 101(1)(b) of the Treaty and Article 53(1)(b) of the European Economic Area (EEA)-Agreement.

The conduct took place between 25 June 2009 and 1 October 2014.

Fines

The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see also MEMO).

In setting the level of fines, the Commission took into account the value of the parties’ sales of diesel passenger cars equipped with SCR-systems in the EEA in 2013 (the last full year of infringement), the gravity of the infringement and the geographic scope.

An additional reduction was applied for all parties given that this is the first cartel prohibition decision based solely on a restriction of technical development and not on price fixing, market sharing or customer allocation. The amount of the reduction of 20% takes into account that this type of conduct is expressly prohibited by Article 101(1)(b) of the Treaty.

Under the 2006 Leniency Notice:

  • Daimler received full immunity, thereby avoiding an aggregate fine of ca. €727 million.
  • Volkswagen group benefited from a reduction of the fine under the 2006 Leniency Notice. The reduction reflects the timing of the cooperation and the extent to which the evidence Volkswagen group provided helped the Commission to prove the existence of the cartel.

In addition, the Commission applied a reduction of 10% of the fines of all parties under the 2008 Settlement Notice in view of the acknowledgement of their participation in the cartel and of their liability in this infringement.

Also read: Here’s How Many Plug-In-Hybrids And All-Electric Cars Have Been Sold By Mercedes-Benz

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