Volkswagen, BMW fined $1 billion for emissions colluding

Daimler avoided the biggest fine because it blew whistle on plot

Germany’s three largest carmakers colluded illegally to limit the effectiveness of their emissions technology, leading to higher levels of harmful diesel pollution, European antitrust authorities said Thursday.

Volkswagen and its Porsche and Audi divisions must pay 500 million euros, or $590 million, and BMW will pay 373 million euros, or $442 million, as part of a settlement with the European Commission related to the cartel. Daimler avoided a fine that would have totaled 727 million euros because it blew the whistle on the plot, the European Commission said.

The settlement is another blow to the image of the German automakers, who dominate the high end of the car market but have lost some of their luster after Volkswagen admitted in 2015 that millions of cars it produced were fitted with software designed to dupe official emissions testers.

Daimler and BMW became tainted by the diesel scandal after the European Commission accused them in 2017 of illegally agreeing with Volkswagen on specifications for emissions treatment technology. Those accusations led to the settlement Thursday.

The European Commission, the European Union’s administrative arm, did not accuse the carmakers of agreeing to deploy illegal technology. Rather, it said that they illegally agreed to deploy emissions technology that met minimum legal standards but was not as good as it could have been.

Among other things, the carmakers agreed to limit the size of the tanks used to hold a chemical, known as Adblue, that neutralizes harmful nitrogen oxides in diesel emissions, the commission said. Larger tanks would have done a better job reducing pollution but taken space that companies preferred to use for audio speakers or other amenities. “For over five years, the car manufacturers deliberately avoided to compete on cleaning better than what was required by EU emission standards,” Margrethe Vestager, the European Union’s competition commissioner, said in a statement. “And they did it despite the relevant technology being available.”

Volkswagen has since paid well over $20 billion in fines and legal settlements related to its diesel emissions cheating. Daimler admitted last year that its Mercedes-benz vehicles were also programmed to cheat on admissions tests and paid $2.2 billion as part of a settlement with U.S. authorities. Sales of diesel vehicles, which once accounted for more than half of the new cars sold in Europe, have plummeted.

BMW portrayed the settlement as a vindication because it did not accuse the company of emissions cheating, which it has consistently denied. The fine was lower than expected, freeing up 1 billion euros that BMW had set aside to cover penalties related to the cartel case.

“Unlike some of its competitors, the BMW Group never considered reduced, illegal emission control,” the company said in a statement. Discussion with the other carmakers “had no influence whatsoever on the company’s product decisions,” BMW said.

Daimler noted that it cooperated with the investigation.

“The European Commission explicitly found no evidence that there was any agreement regarding the use of prohibited defeat devices,” the company said in a statement.

Volkswagen agreed to the settlement but said it was considering appealing some aspects of it, which is permitted under European Union law.

“The commission is breaking new legal ground with this decision, because it is the first time it has prosecuted technical cooperation as an antitrust violation,” Volkswagen said in a statement. “It is also imposing fines even though the contents of the talks were never implemented and customers were therefore never harmed.”