By agreeing to avoid competition on technical development of the cleaning technology, the European Commission (the European Union’s administrative arm) said the German carmakers, along with Volkswagen subsidiaries Audi and Porsche, breached EU antitrust rules.
Daimler was also reportedly involved but avoided a fine for blowing the whistle on the plot.
Why are BMW and Volkswagen under fire?
The settlement comes after Volkswagen admitted in 2015 that millions of cars it produced were fitted with software designed to cheat emissions tests.
The latest charges are related to regular technical meetings that took place between 2009 and 2014 to discuss the development of technology that eliminates nitrogen-oxide emissions, according to the Commission.
One thing the carmakers had reportedly agreed to do was limit the size of the tanks used to hold AdBlue, a chemical that neutralizes harmful nitrogen oxides in diesel emissions.
Larger tanks would be better at reducing pollution but would take up space that companies wanted to use for speakers or other features.
Volkswagen and BMW fight back
Even though Volkswagen agreed to a settlement, it is considering whether to take legal action and appeal the ruling. The company says the penalty over technical talks about emissions technology sets a questionable precedent by treating technical cooperation as an antitrust violation.
The company criticized the Commission guidelines on technical cooperation agreements between carmarkers, saying they need to be updated and no longer serve the complex challenges faced by the automotive industry.
Other fines and emissions scandals
This fine is different from the scandal that has been dubbed "Dieselgate," which involved Volkswagen designing software to cheat on vehicle emissions tests. That led to almost $40 billion in fines, buybacks, and legal fees for the Volkswagen Group.