European Commission accuses BMW, Daimler and Volkswagen of blocking SCR and GPF technology

5 April 2019

The European Commission has informed BMW, Daimler and VW (Volkswagen, Audi, Porsche) of its preliminary view that they have breached EU antitrust rules from 2006 to 2014 by colluding to restrict competition on the development of emission aftertreatment technology for passenger cars.

Now, BMW, Daimler and VW have an opportunity to appeal Commission’s findings. If the regulators still believe the companies violated antitrust laws, the carmakers could be fined up to 10% of their global turnover. Daimler, who was the whistle blower in this case, said it did not expect to be fined as a result of its information.

According to the Statement of Objections sent by the Commission to the carmakers, BMW, Daimler and VW participated in a collusive scheme, in breach of EU competition rules, to limit the development and roll-out of emission technology for new diesel and petrol passenger cars sold in the European Economic Area (EEA). This collusion occurred in the framework of the car manufacturers’ so-called “circle of five” technical meetings. In particular, the Commission has concerns regarding the following technologies:

• Selective Catalytic Reduction (SCR) systems to reduce NOx emissions of diesel passenger cars. In the Commission’s preliminary view, BMW, Daimler and VW coordinated their urea (AdBlue) dosing strategies, AdBlue tank size and refill ranges between 2006 and 2014 with the “common understanding that they thereby limited AdBlue-consumption and exhaust gas cleaning effectiveness”.
• Otto (gasoline) particle filters (OPF or GPF) to reduce particle emissions from petrol direct injection (GDI) passenger cars. In the Commission’s preliminary view, BMW, Daimler and VW “coordinated to avoid, or at least to delay, the introduction of GPF in their new (direct injection) petrol passenger car models between 2009 and 2014, and to remove uncertainty about their future market conduct”.

The Commission’s preliminary view is that the car manufacturers’ behavior aimed at restricting competition on innovation for these two emission systems and in doing so, denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers. Such market behavior, if confirmed, whilst not entailing price fixing or market sharing, would violate EU competition rules prohibiting cartel agreements to limit or control production, markets or technical development, the Commission said.

The Commission’s accusations are issued in the atmosphere of distrust to the automotive industry, following the Volkswagen emission scandal. However—regardless whether a coordination of industry positions in regards to government regulations is legal or not under EU laws—it is naïve to expect that carmakers would have implemented new, more costly emission technologies before they were forced to do so by emission regulations. It’s been always the industry practice to introduce new emission controls in the first model year covered by the new, more stringent emission standards—with only few exceptions, when limited early adoption of new technology was driven by various incentives, local emission requirements, or political reasons.

The Commission’s Statement of Objections are the result of an in-depth investigation opened in September 2018.

Source: European Commission