Friday, 12 October 2018

Commission investigates collusion among car manufacturers

Guest post by dr Kati Cseres, Associate Professor at the Amsterdam Centre for European Law and Governance, University of Amsterdam

On 18 September the European Commission has announced that it has opened an investigation against BMW, Daimler and Volkswagen, Audi and Porsche from the VW group, based on information that they had colluded, in breach of EU competition rules, to avoid competition on the development and roll-out of technology to clean the emissions of petrol and diesel passenger cars.

EU Commissioner, Margrethe Vestager, in charge of the competition policy portfolio, said: "The Commission is investigating whether BMW, Daimler and VW agreed not to compete against each other on the development and roll-out of important systems to reduce harmful emissions from petrol and diesel passenger cars. These technologies aim at making passenger cars less damaging to the environment. If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers."

The Commission's investigation focusses on information indicating that BMW, Daimler, Volkswagen, Audi and Porsche participated in meetings where they discussed inter alia the development and deployment of technologies to limit harmful car exhaust emissions. In particular, the Commission is assessing whether the companies colluded to limit the development and roll-out of certain emissions control systems for cars sold in the European Economic Area (Article 101 of the Treaty on the Functioning of the European Union). While the EU competition rules certainly leave room for technical cooperation aimed at improving product quality, the current investigation concerns specific cooperation that is suspected to have aimed at limiting the technical development or preventing the roll-out of technical devices. The Commission has, however, stated that at this stage of the investigation it “has no indications that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing”.

The Commission’s statement and act comes three years after  the Dieselgate scandal started with a violation notice issued by the US Environmental Protection Agency (EPA) to the VW group revealing that “defeat devices”, meant to game emissions testing, had been fitted to nearly half a million cars.

EU Commissioner Vera Jourová, responsible for Justice, Consumers and Gender Equality  has also been actively pursuing a solution for European consumers by way of legislation and proposing a New Deal for consumers as well as obtaining action plans from Volkswagen.

Should the current investigation of the Commission, Vestager’s DG Competition indeed find that Volkswagen group, Daimler and BMW has colluded on, consumers will have another strong case to bring before national courts and claim damages for the harm they suffered. At the same time, this is another strong signal for the other EU institutions that there should be further hesitation to support an EU wide collective action mechanism which effectively compensates harmed consumers.

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