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EU finds German automakers colluded on emissions technology

April 5, 2019

German car giants VW, Daimler and BMW colluded to restrict the development of technology to clean emissions from passenger cars, the European Commission said in preliminary findings from its antitrust probe.

Audi, Volkswagen, BMW, Mercedes-Benz and Porsche logos
Image: picture-alliance/U. Baumgarten

German car manufacturing giants Volkswagen, Daimler and BMW illegally colluded to hinder competition on emission cleaning technology, the European Commission said on Friday.

The initial findings from an investigation by the EU's antitrust regulators came nearly two years after authorities carried out raids on their headquarters.

What the Commission found:

  • From 2006 to 2014, the three German automakers conspired to limit the development and rollout of emission cleaning technology for passenger cars sold in Europe.
  • The talks were aimed at restricting competition and "breached EU antitrust rules."
  • Two types of technology, specifically, were restricted: one to reduce nitrogen oxide emissions from diesel cars and another to reduce harmful particulate matter from petrol engine cars.
  • The companies "denied consumers the opportunity to buy less polluting cars" despite the technology being available.

Read more: Why veering Germans away from cars is tough

Who gets stuck with the diesel bill?

Colluding 'not to improve their products'

EU Commissioner Margrethe Vestager, who is in charge of competition policy, said EU antitrust authorities were concerned that VW, BMW and Daimler deliberately restricted their customer's access to the best technology.

"Companies can cooperate in many ways to improve the quality of their products. However, EU competition rules do not allow them to collude on exactly the opposite: not to improve their products, not to compete on quality," Vestager said in a statement.

BMW said it would set aside more than €1 billion ($1.13 billion). The German automaker said it has deduced that "the European Commission is most likely to issue a fine of a significant amount."

VW said it would review the allegations, but noted that "cooperation between manufacturers on technical issues in the automotive sector is common around the world."

Meanwhile, Daimler said it "has cooperated at an early stage and comprehensively with the European Commission as chief witness and does for that reason not expect a fine in this matter."

Read more: How Volkswagen wants to drive e-mobility revolution

Diesel demand down in Germany

German car giants in hot water: Friday's preliminary findings were the latest emissions scandal to hit the German auto industry. VW, in particular, has been hit hard by the 2015 "Dieselgate" emissions cheating scandal, where the company admitted to fitting 11 million vehicles around the world with a device to cheat air pollution tests. BMW, Daimler and VW were also heavily criticized in 2018 for paying for animal tests that exposed monkeys to toxic diesel fumes.

What happens next: The Commission said it has notified the companies of its initial findings and sent a "statement of objections." The German automakers will now have a chance to respond. Antitrust regulators emphasized that the investigation is not yet over. Should VW, BMW and Daimler be found guilty of violating antitrust rules, however, the Commission can impose a fine of up to 10 percent of each company's annual worldwide turnover.

Read more: EU hits car-part makers with €368 million price-fixing fine

ls,rs/jil (dpa, AFP, Reuters)

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