Volkswagen, BMW fined $1 billion by EU over ‘emissions cartel’

In an unprecedented move, the European Commission has fined German carmakers Volkswagen and BMW €875 million ($1 billion) on Thursday after it was found in breach for colluding to limit the use of emissions cleaning technology developed by the companies.

Separate from the so-called Dieselgate scandal where Volkswagen was found to be using software designed to cheat on vehicle emissions tests, the fine is a first as it extends the application of European competition law to technical-level discussions held between industry operatives.

In this particular instance, the discussions in question were held 10 years ago on the design standards for AdBlue, an additive used to cleanse nitrogen oxide from the exhaust gases produced by diesel-powered cars.

Speaking at a press conference on Thursday, EU antitrust chief Margrethe Vestager told a news conference in Brussels:

“This is a first. We have never had a cartel whose purpose was to restrict the use of novel technology.”

Reuters reports that under the settlement, Volkswagen will pay a fine of €502 million and BMW of €373 million. Daimler, also part of the cartel, reportedly made it out without a fine after revealing the cartel’s existence.

Ms Vestager explained that the German carmakers, including VW units, Audi and Porsche, had been in possession of technology to reduce harmful emissions, which more than satisfy EU legal requirements for reducing emissions, but avoided using the technology and thus competing with each other.

“So, today’s decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude”, said Ms Vestager.

The EU had narrowed the original scope of its investigation to ensure its charges stuck.

While a settlement reached by the involved parties reflects some admission of the companies’ roles in the cartel, Volkswagen has said it is considering whether to take legal action.

“The Commission is entering new judicial territory because it is treating technical cooperation for the first time as an antitrust violation,” Volkswagen said.