EU regulators say BMW, Daimler, Volkswagen colluded to block emission-fighting technology

European regulators say BMW, Daimler, Volkswagen breached antitrust rules. Photo / Getty Images

BMW, Daimler and Volkswagen colluded to suppress the development of emissions-fighting technology during their annual "circle of five" confabs, breaching antitrust rules, European regulators charged Friday.

The European Commission said the coordinated effort zeroed in on emissions systems for gas- and diesel-powered passenger vehicles from 2006 to 2014. Those discussions took place during technical meetings attended by representatives of the German automakers, as well as Volkswagen's Audi and Porsche units, regulators allege.

Although companies can work together to improve their products, European Union rules prohibit them from doing the opposite, "to not compete on quality," the bloc's competition commissioner, Margrethe Vestager said in a news release Friday. "We are concerned that this is what happened in this case."

As a result, she said, "consumers may have been denied the opportunity to buy cars with the best available technology."

The EU outlined the allegations in a statement of objections, which is a formal step in an antitrust inquiry. The car manufacturers will now have an opportunity to respond to its findings.

Daimler said in a statement Friday that it is cooperating with the panel and "does not expect to receive a fine in this matter."

VW said it would "examine the complaints and issue a statement after evaluating the investigation file as part of its cooperation."

BMW, meanwhile, said, "Lawful coordination of industry positions on regulatory framework should not be equated with unlawful cartel agreements."

It is unclear what kind of penalties the automakers might face.

When asked why a company might want to stall or avoid developing new technology, Andre Boehman, a professor at the University of Michigan's Energy Institute, said, "The simple answer is cost."

In the EU case, he said, the resources needed to develop and implement clean-air technology might have required automakers to raise car prices, which can hurt sales.

The accusations come just weeks after the US Securities and Exchange Commission accused Volkswagen of defrauding investors during the company's extensive diesel-emissions scandal.

The SEC alleges VW raised more than US$13 billion ($19.3b) from American investors as top executives cheated emissions tests. The Wolfsburg, Germany-based automaker has dismissed the claims and contends the agency is simply "piling on."

In 2017, Volkswagen pleaded guilty to fraud, obstruction of justice and falsifying statements as part of a settlement with the US Justice Department over intentionally cheating on emissions tests for at least six years. The company agreed to pay as much as US$25b to American car owners, environmental regulators, states and dealers.

The EU investigation is the latest move in a series of aggressive actions involving big tech. European regulators' litany of investigations and enforcement actions presents a sharp contrast to their US counterparts, who have come under increasing criticism from lawmakers and consumer advocates for taking a far more subdued approach on competition.

Last month, Vestager fined Google about US$1.7b on charges its advertising practices violated antitrust laws, marking the third time in as many years the region's watchdogs have penalised the US tech giant for harming competition and consumers. All told, European regulators have levied more than US$9b in fines against the company.

Vestager also has acknowledged that an antitrust investigation against Amazon is in an "advanced" stage. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

Earlier this week, the head of the US Federal Trade Commission, the nation's top consumer watchdog, asked Congress for more resources and authority to pursue privacy cases. Repeated data breaches and abuses of personal information have raised questions about the FTC's ability to challenge the big tech companies.