EU fines Volkswagen and BMW €875m over diesel emissions

The European Commission has fined Volkswagen and BMW a total of €875m for breaking EU antitrust rules by colluding to prevent the deployment of clean emissions technology.

Daimler, which was also part of the cartel, escaped a €727m fine because the German carmaker revealed the existence of the group, the commission said in a statement on Thursday.

All companies, including Audi and Porsche which are part of VW Group, acknowledged their involvement in the cartel and agreed to settle the case, said the executive body of the EU.

“The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards,” said Margrethe Vestager, the EU commission’s executive vice-president in charge of competition policy.

“So today’s decision is about how legitimate technical co-operation went wrong,” she said. “And we do not tolerate it when companies collude. It is illegal under EU antitrust rules.”

In response to the commission’s decision, VW and BMW both pointed out that the EU was interpreting initial discussions, which did not lead to actual co-operation between the companies, as a violation of antitrust law, even though no customers were harmed as a result.

Asked about the relatively low level of the fines, Vestager said that regulators needed to find a balance between punishing illegal conduct and the novel nature of the behaviour.

She said: “We have never had a cartel where the collusion was to restrict the use of a technical element. It is fair that when we have a novel case on the one hand, the illegal behaviour is being fined, while at the same time recognising that it may have been more uncertain if or if not this was illegal.”

The case against the carmakers was first brought in April 2019, when the German trio received a “Statement of Objections” from Brussels.

It alleged that between 2006 and 2014, the brands had deliberately limited the cleanliness of exhaust emissions, and colluded to delay the introduction of cleaner technologies.

On Thursday, Volkswagen, which has already paid out more than €32bn in penalties and compensation related to the diesel emissions scandal, said the commission was “breaking new legal ground with this decision, because it is the first time it has prosecuted technical co-operation as an antitrust violation”.

“The contents of the talks were never implemented and customers were therefore never harmed,” VW said, adding that the sizes of tanks installed in vehicles were “two to three times higher than discussed in the talks”.

A person close to the company, which will pay €502m, said the fine was a “rather political decision”.

In a statement, BMW pointed out that most of the original charges had been dropped, and that “unlike some of its competitors”, the Munich-based company had never been involved in the manipulation of emissions tests. 

It added that “these discussions had no influence whatsoever on the company’s product decisions” and “were clearly not held in secret”.

The company’s fine, of €373m, is a fraction of the €1.4bn BMW had initially set aside due to the proceedings.

VW said it would consider whether to appeal against the decision, and that it had until mid-September to do so.

Chinese, South Korean and Turkish competition authorities are also investigating the matter.