The EU fined four automotive companies over $1 billion for restricting development of emission-control technology

The EU said the companies avoided competing on technology that reduces pollution by limiting development and distribution of emission-control systems

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The European Union announced Thursday it is fining four German car manufacturers over $1 billion CAD, stating that the companies colluded to hinder the development and launch of emission-control systems.

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Daimler, BMW, Audi and Porsche had developed technology capable of reducing emissions beyond legal limits, but they avoided competition that ultimately inhibited consumers from buying more eco-friendly cars, said Margrethe Vestager, EU antitrust chief, according to the Associated Press.

“Manufacturers deliberately avoided competing on cleaning better than what was required by EU emission standards. And they did so despite the relevant technology being available,” said Vestager.

Volkswagen will pay about $747.5 million CAD and BMW will pay around $554 million CAD, according to Bloomberg, while Daimler avoided a fine by informing the EU about the cartel.

BMW had previously indicated that it would fight the EU, but agreed to settle the probe in May. In a statement to Bloomberg, the company said the EU stopped pursuing allegations of software development to restrict AdBlue dosing, which led to a lower fine. The EU notice, they added, also stated there was no evidence of collusion regarding a defeat device to beat exhaust gas testing.

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BMW said that it had allocated around $2.08 billion after the commission’s initial accusations, but reduced the number of funds it set aside in May after the larger allegations were not being substantiated, reported the Associated Press.

This marks the first instance of the European Commission imposing fines for collusion that restricts technological developments.

Vestager said that the four companies agreed on uniform size for onboard tanks, according to the Associated Press. The tanks contain a urea solution named AdBlue that is injected into a vehicle’s exhaust stream, which reduces pollution from diesel-powered engines. Larger tanks allow vehicles to emit less pollution.

Collaboration between car manufactures is allowed under EU rules, said Vestager, when cooperation fosters efficiency gains and the introduction of new technology.

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“But the dividing line is clear: Companies must not coordinate their behaviour to limit the full potential of any type of technology,” said Vestager.

BMW stated that the collaboration with the other auto manufacturers regarding AdBlue tanks did not influence the company’s decisions.

Volkswagen stated that the investigation concluded by finding that other forms of cooperation in question did not violate antitrust laws.

“The (EU) Commission is breaking new legal ground with this decision because it is the first time it has prosecuted technical cooperation as an antitrust violation,” said Volkswagen in a statement. “It is also imposing fines even though the contents of the talks were never implemented and customers were therefore never harmed.”

The fine is not linked with ‘dieselgate,’ the Associated Press reported. Dieselgate was a 2015 scandal wherein Volkswagen admitted to placing software in over 11 million diesel vehicles around the world that reduced nitrogen dioxide emissions when the cars were being tested but amped the levels back up during driving, according to BBC.

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The EU fined four automotive companies over $1 billion for restricting development of emission-control technology