Volkswagen, BMW, and Other Automakers Just Received a Massive $1 Billion Fine
Lisa Steuer McArdle
· 3 min read
Volkswagen Group and
BMW
are being hit with a fine by the European Union (EU) totaling $1 billion for colluding to slow the deployment of cleaner emissions technology, says the EU. Volkswagen Group has been ordered to pay $595 million, while BMW must pay $442 million. The German carmakers had the technology to reduce harmful emissions more than required by EU law, but did not compete to do so, according to
Reuters
. 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.
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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.
Volkwagen also argues that the fines had been set even though the contents of the talks were never implemented, and thus no customers suffered harm, according to
CNN
. 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.
Meanwhile, BMW said in a statement the Commission had dropped most of its charges of antitrust violations, clearing the company of suspicion of using prohibited devices to cheat on emissions tests.
It’s true that the European Commission did not accuse the carmakers of agreeing to deploy illegal technology. Instead, it said the companies had illegally agreed to deploy emissions technology that met minimum legal standards, but this technology was not as good as it could have been, according to
The New York Times
.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.
Last year, Daimler admitted its Mercedes-Benz cars had also been programmed to cheat on emissions tests. The company paid $2.2 billion as part of a settlement with U.S. authorities.
