EU fines Volkswagen and BMW 875 million euros for collusion

[Ursus]

https://www.theguardian.com/environm...imler-on-fumes

The EU has fined Volkswagen and BMW €875m (£750m) after finding that the German carmakers colluded with another rival, the Mercedes-Benz owner Daimler, to delay emissions-cleaning technology.

The European Commission said that the carmakers had “breached EU antitrust rules by colluding on technical development in the area of nitrogen oxide cleaning”.

Volkswagen, the world’s largest manufacturer of cars, will pay €502m, a reduction of more than half the original fine because it cooperated with the investigation. BMW will pay €372m, far lower than the provision for well over €1bn that it had initially made. Daimler escaped without a fine because it had revealed the cartel to the commission.

The fines are the latest blow to the German car industry in relation to diesel pollution, after the “Dieselgate” cheating scandal, in which Volkswagen and Daimler were found to have added software, known as defeat devices, that during testing deliberately reduced emissions during testing of nitrogen oxides harmful to human health. Volkswagen and Daimler have both paid out billions of euros in fines and compensation.

The commission’s latest announcement said that the carmakers had also worked together over a period of five years to delay more efficient technology to remove nitrogen oxides by adding urea (a chemical found in mammals’ urine that is sold as “AdBlue”) to exhaust gases. While the process dramatically lowers diesel emissions, it lowers the performance of the engines.

Daimler, BMW and Volkswagen, plus VW’s Audi and Porsche brands, exchanged information on AdBlue tank sizes, meaning they did not have to worry about competing with each other on having cleaner engines, the commission said.

Margrethe Vestager, the commission’s powerful executive vice-president in charge of competition policy, said: “The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards.

“But they avoided competing on using this technology’s full potential to clean to higher standards than what is required by law.”

I'm not at all surprised by BMW and Daimler doing this, but I am truly shocked that Volkswagen would partake in such a thing. Who would have thought that the car company founded by Hitler could do something so terrible?

[prwraith]

Ha volkswagen falsifies emission testing and now colludes over emission technology.

That's amazing

[Bakis]

This is actually a bombshell in so many ways.
What time period does it refer to?

[Rennadrel]

This is actually a bombshell in so many ways.
What time period does it refer to?

Probably the last 10 years, maybe less. The company I work for is a supplier for VW and the Daimler-Mercedes division and we had to halt some of the production over the emissions scandal. I don't even know if production ever started up again.

[Yadryonych]

It is funny how daimer had the largest fine of them all but was entirely pardoned for ratting out

[Magical Mudcrab]

It is funny how daimer had the largest fine of them all but was entirely pardoned for ratting out

It's unfortunate but you don't get whistleblowers in an industry like car manufacturing if you harshly penalize the whistleblowers (i.e.: they won't put themselves at risk, but they will put others at risk to minimize their own).

[breadisfunny]

It's unfortunate but you don't get whistleblowers in an industry like car manufacturing if you harshly penalize the whistleblowers (i.e.: they won't put themselves at risk, but they will put others at risk to minimize their own).

in the us whistleblowers in non government sectors always end up blacklisted.

[Magical Mudcrab]

in the us whistleblowers in non government sectors always end up blacklisted.

I'm more referring to Daimler making agreements with the EU to act as an informant on other industry leaders, but you are correct that private sector protections for whistleblowers in the Americas are severely lacking.

[breadisfunny]

I'm more referring to Daimler making agreements with the EU to act as an informant on other industry leaders, but you are correct that private sector protections for whistleblowers in the Americas are severely lacking.

try virtually nonexistant.

[Yadryonych]

It's unfortunate but you don't get whistleblowers in an industry like car manufacturing if you harshly penalize the whistleblowers (i.e.: they won't put themselves at risk, but they will put others at risk to minimize their own).

I highly doubt there was a tiniest bit of a noble intent behind this "whistleblowing".

Daimler scored largely and cashed out grandly while also putting a strain on its opponents, all this only when the collusion has become useless due to looming combustion engine prohibitions. They played dirty the EU then they played dirty their "partners"

[Magical Mudcrab]

I highly doubt there was a tiniest bit of a noble intent behind this "whistleblowing".

Daimler scored largely and cashed out grandly while also putting a strain on its opponents, all this only when the collusion has become useless due to looming combustion engine prohibitions. They played dirty the EU then they played dirty their "partners"

Don't get me wrong, I'm not under the illusion that this was done under the pretense of doing the right thing. This was a calculated move done to reduce Daimler's risk at the expense of Volkswagen and BMW; however, penalizing Daimler after having done this, even though they were the most abusive, would disincentivize this kind of action in the future. My point was more that allowing Daimler off the hook is an unfortunate reality, as the alternative is tighter collusion between private sector entities (which is already fairly close-knit).

[Rennadrel]

Don't get me wrong, I'm not under the illusion that this was done under the pretense of doing the right thing. This was a calculated move done to reduce Daimler's risk at the expense of Volkswagen and BMW; however, penalizing Daimler after having done this, even though they were the most abusive, would disincentivize this kind of action in the future. My point was more that allowing Daimler off the hook is an unfortunate reality, as the alternative is tighter collusion between private sector entities (which is already fairly close-knit).

Well Daimler is part of the same brand as Mercedes, all part of the VW and Audi auto group. Realistically they are a much bigger corporation than any of the other automotive manufacturers just because of all the brands encompassed into their structure. Some of the American car companies have gotten into joint ventures in recent years, like the 10 speed automatic found in new Ford vehicles is also in GM's lineup. But you'll never see brands merge like the VW AG has.

[Slant]

I'm not at all surprised by BMW and Daimler doing this, but I am truly shocked that Volkswagen would partake in such a thing. Who would have thought that the car company founded by Hitler could do something so terrible?

Way to Godwin yourself in the first post...

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I highly doubt there was a tiniest bit of a noble intent behind this "whistleblowing".

Daimler scored largely and cashed out grandly while also putting a strain on its opponents, all this only when the collusion has become useless due to looming combustion engine prohibitions. They played dirty the EU then they played dirty their "partners"

Not to ruin the fun for you, but this isn't a strain. You guys seem to have no idea about the proportions of how big these corporations are. Just as an example: BMW put 1.4 billion Euros aside last year to deal with this. Beginning of this year they dissolved 1 billion of that cash pile because they could see the fine wasn't going to be as big as expected.

None of these companies will be in danger of hurting a lot. They'll hopefully get the message, but this "scored largely and cashed out grandly" is not as big as you think it is. BMW makes 100 billion a year in revenue. VW does 250 billion a year in revenue. Daimler is somewhere in between.

[Draco-Onis]

It's nice to see that slap on the wrists fines is "justice" for the rich worldwide /s

[Dezerte]

VW does 250 billion a year in revenue

A 500€ million fine would then be 0.2% of their revenue (just to drive home the point how insignificant this fine is).

[Draco-Onis]

A 500€ million fine would then be 0.2% of their revenue (just to drive home the point how insignificant this fine is).

Yup it's basically the price of doing business this is chump change and no one goes to jail, there is no deterrent for powerful corporations not to do these types of things.

[Slant]

Yup it's basically the price of doing business this is chump change and no one goes to jail, there is no deterrent for powerful corporations not to do these types of things.

Well, it's not a big sum for them, but half a billion bucks is still half a billion bucks. The deterrent is there, but it's not meant to ruint he company, obviously. If Volkswagen went bust over these things, we'd instantly have a major economic crisis in the center of Europe. So, a delicate touch probably goes a long way.

The PR damage is probably more significant than the monetary damages.

[Draco-Onis]

Well, it's not a big sum for them, but half a billion bucks is still half a billion bucks. The deterrent is there, but it's not meant to ruint he company, obviously. If Volkswagen went bust over these things, we'd instantly have a major economic crisis in the center of Europe. So, a delicate touch probably goes a long way.

The PR damage is probably more significant than the monetary damages.

.2% is nothing, 50% of a year's earnings would not ruin the company, what's the argument against any of the executives going to jail? If any regular person commits fraud against the government they face jail time.

[Slant]

.2% is nothing, 50% of a year's earnings would not ruin the company, what's the argument against any of the executives going to jail? If any regular person commits fraud against the government they face jail time.

In an industry where profit margins are in the sub 1 percentile, .2% is meaningful. Not dramatic, but it's not something to be completely ignored.

[Draco-Onis]

In an industry where profit margins are in the sub 1 percentile, .2% is meaningful. Not dramatic, but it's not something to be completely ignored.

Their margin is between 1-2 percent taking half of their profit is not outrageous considering the act. What's your excuse for not throwing the executives who committed fraud in jail? Why is it okay for them to commit fraud on such a scale and getting away Scott free?