‘Circle of five’ carmakers under EU cartel investigation

EU competition chief Margrethe Vestager. [European Commission]

Updates with reaction from Volkswagen Group and BMW Group

On the third anniversary of Dieselgate, the European Commission announced on Tuesday (18 September) that its anti-competition team is looking into BMW, Daimler and the VW group for allegedly limiting the roll-out of technology meant to clean up car emissions.

In a statement, the EU executive revealed that it has opened an investigation into the German carmakers, including Volkswagen, Audi and Porsche from the VW group, based on information that they had agreed not to compete against each other.

A VW group spokesperson told EURACTIV in emailed comments that the group has been “fully co-operating with the European Commission and will continue to co-operate with the Commission”, but could not comment on an ongoing investigation.

The spokesperson said the investigation was “a purely procedural step in the process, which was fully expected by Volkswagen. The presumption of innocence continues to apply until the investigations have been fully completed.”

A BMW spokesperson also told EURACTIV that the carmaker will support the Commission’s investigation but explained that “it is important to make a clear distinction between possible violations of anti-trust law and a targeted manipulation of exhaust gas treatment, as the latter allegation does not relate to the BMW Group”.

Daimler, for its part, told Bloomberg it was also cooperating with the EU executive.

Competition Commissioner Margrethe Vestager said her services are looking into whether the car giants colluded to limit the development and roll-out of “technologies [that] aim at making passenger cars less damaging to the environment”.

The Danish anti-trust chief added that “if proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers”.

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In October 2017, the Commission revealed that it had carried out preliminary inspections on the premises of BMW, Daimler, Volkswagen, Audi and Porsche, and its inquest will now look into a series of meetings between the so-called “circle of five”.

The “priority” investigation will only assess whether the carmakers curbed the development of selective catalytic reduction systems, which target nitrogen oxide particles from diesel engines, and ‘Otto’ particulate filters, which are fitted to petrol engines.

According to the EU executive, the “circle of five” also discussed other technical topics like the maximum speed convertible car roofs should open and close, as well as cruise control details, but these issues are not subject to the inquest.

In its statement, the Commission insisted that the institution “has no indications that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing”.

The Commission announcement comes three years to the day since the US Environmental Protection Agency (EPA) served the VW group with a violation notice, revealing that “defeat devices”, meant to game emissions testing, had been fitted to nearly half a million cars.

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Clean mobility NGO Transport & Environment told EURACTIV that the Commission statement is “a timely reminder that the German car industry puts profits above people and the law”.

T&E’s clean vehicles director, Greg Archer, said that “There have been eight recent cartel cases affecting the automotive sector with cumulative fines of €4.5 billion and this [case] closely resembles the one that caught truckmakers. They are symptomatic of an industry that views itself above the law.”

Ugo Taddei, a lawyer with green advocacy group ClientEarth said: “These latest revelations tell us that the tech has been there for many years to reduce harmful emissions from vehicles, but the industry has been resistant to change. And this is still clearly going on.”

The EU is currently busy trying to agree on new rules on car carbon dioxide emissions for the next decade. MEPs are due to vote on the issue next month amid a long-standing row between lawmakers and carmakers over how ambitious cuts should be.

Indeed, Greens MEP Bas Eickhout, who is helming the bloc’s first attempt to regulate truck emissions, did not hold back in his criticism of the German carmakers: “Once again the companies behind Dieselgate […] are under suspicion for ganging up to use dirty tricks to promote deadly cars for huge profits.”

The Dutch lawmaker, who this week said he wants to be the Greens’ pick to succeed Jean-Claude Juncker as Commission president, concluded “If they won’t change their behaviour and move away from dirty diesel after such massive public outcry and scientific evidence then the Commission should hit them where it hurts, in their pockets.”

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Carmakers will have to reduce carbon dioxide emissions by 45% by 2030, according to members of the European Parliament’s environment committee, who voted on Monday night (10 September) to tune up a European Commission proposal.

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