The European Commission said on Tuesday that it is opening an investigation into possible collusion among Volkswagen Group, BMW, and Daimler to avoid competition on developing state-of-the-art emissions control technology.
According to Bloomberg, EU Competition Commissioner Margrethe Vestager told reporters at a press conference that the investigation is not focused on price-fixing as much as it is focused on the allegation that the companies together “agreed not to use the best technology” in order to cut costs together.
The emissions control technology in question applies to both gas and diesel vehicles in the EU. A press release from the European Commission noted that it suspected the companies of agreeing to limit the development and roll-out of two types of emissions-regulating technology. The first is Selective Catalytic Reduction (SCR) systems, which are specific to diesel engines and reduce the amount of nitrogen oxides (NOx) emitted by the vehicle. The second are “Otto” Particulate Filters (OPF), which reduce the particulate emissions from gasoline vehicles. These emissions treatment systems are based on their diesel counterparts and started appearing in Daimler vehicles after 2014.
The emissions problem
Auto manufacturers have an incentive to skimp on emissions reduction systems because they generally add weight and cost to the car, which affects two things consumers look for most: performance and price. While consumers may care that their cars are not polluting the environment, there’s rarely a direct way to know how good or bad your emissions system is without relying on testing by a third party or assurance from the government. Agreeing to hold back on emissions reduction systems might allow several car makers to look as if their cars are no worse than other similar cars as far as emissions in those third-party tests.
The investigation comes as VW Group is still cleaning up the mess from its emissions cheating scandal. In 2015, the US Environmental Protection Agency (EPA) discovered that VWs, Audis, and Porsches (all made by parent company VW Group) were running illegal software that activated the emissions control system under lab testing and reduced its effectiveness on the road. That software is known as a “defeat device” in auto-regulation parlance.
The EU Commission said on Tuesday that it “has no indications that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing.”
Last year, German magazine reported on allegations that VW Group, Daimler, and BMW had been meeting since the 1990s “to coordinate activities related to vehicle technology, costs, suppliers and strategy as well as diesel emissions controls,” Bloomberg wrote.
The EU Commission noted that it doesn’t “prejudge” the outcome of its investigations. Still, the Commission wrote, “If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers.” As a result, the investigation is being prioritized.
Lots of talking
The EU Commission’s announcement added that it was certain that VW Group companies, BMW, and Daimler had also met to discuss “common quality requirements for car parts, common quality testing procedures, or exchanges concerning their own car models that were already on the market.”
The German car makers also “had discussions on the maximum speed at which the roofs of convertible cars can open or close, and at which the cruise control will work.” They also apparently “pooled technical expertise” to “improve testing procedures for car safety.”
These discussions, however, are not being investigated as potentially collusive actions, the EU Commission said, due to insufficient proof that they “constituted anti-competitive conduct.”