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Daimler, Volkswagen & BMW Face Big Fines After Being Charged With Emissions Collusion

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【Summary】The European Union (EU) said German automaker Volkswagen along with Daimler and BMW broke antitrust rules by acting together to delay the introduction of two emission cleaning systems between 2006 and 2014. The emission reducing technology would have lowered harmful emissions if installed in production vehicles.

FutureCar Staff    Apr 05, 2019 6:53 PM PT
Daimler, Volkswagen & BMW Face Big Fines After Being Charged With Emissions Collusion
Daimler chief executive Dieter Zetsche speaks at the Geneva International Motor Show in 2016. (Sandro Campardo/European Pressphoto Agency)

Volkswagen has already plead guilty to emissions cheating in the 2015, which now infamously known as "dieselgate" and now the automaker once again finds itself caught up in another emissions scandal.

The European Union (EU) said German automaker Volkswagen along with Daimler and BMW broke antitrust rules by acting together to delay the introduction of two emission cleaning systems between 2006 and 2014. The emission reducing technology would have lowered harmful emissions if installed in production vehicles.

The European Commission said it had sent statements of objections to the German carmakers detailing the charges, nearly two years after carrying out early dawn raids at their headquarters.

The Commission also said it was probably issue a "significant fine" and it would set aside a provision of likely more than 1 billion euros, hurting first-quarter earnings.

"Daimler, VW and BMW may have broken EU competition rules. As a result, European consumers may have been denied the opportunity to buy cars with the best available technology," European Competition Commissioner Margrethe Vestager said in a statement.

The EU said the collision took place during technical meetings held by the "circle of five" German automakers—BMW, Daimler, and the Volkswagen Group's, Audi and Porsche brands.

BMW denied the allegations and said it would contest the allegations "with all legal means if necessary".

The EU focused on selective catalytic reduction systems, which reduce harmful nitrogen oxide emissions from diesel-powered vehicles and "Otto" particulate filters that reduce particulate matter emissions from gasoline-powered vehicles.

The term "Otto" is frequently used in Germany for gasoline particulate filters which are used to help control emission. These filter are used in gasoline direct injection (GDI) engines to help reduce Particle Number (PN) emissions, which are higher compared to conventional multi-port fuel injection (MPFI) engines.

EU enforcers said their case was not related to other investigations into the use of illegal defeat devices to cheat emissions tests and possible violations of environmental laws referring to Volkswagen's guilty plea in the dieselgate scandal.

EU fines are costly and reach as high as 10 percent of a company's global turnover. Volkswagen shares were down 0.8 percent in late session trading, Daimler was 0.6 percent lower, while BMW was up 0.8 percent in a flat European auto index.

Bas Eickhout, a European Parliament lawmaker from the Green Party, said the actions of the "circle of five" put a brake on innovation.

The Commission did not say why the companies might have wanted to block emissions cleaning technology, but new systems can often add to costs for both manufacturers, which are then passed on to consumers.

Volkswagen, may have cheated on emissions in the past in order to advertise higher torque and horsepower in its diesel-powered models. After customers in Europe had their VW vehicles repaired as a result of dieselgate, many experienced reduced power and acceleration.

Daimler is the whistleblower in this case even though it was accused of participating in emissions collusion. The automaker alerted the regulator to the collusion between Germany's biggest automakers. As a result, the company does not expect to be fined for offering up information about the case.

Volkswagen said it would examine the EU accusations before making further comment.


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