On April 5, 2019, the Commission issued a Statement of Objections (“SO”) to BMW, Daimler, and Volkswagen (“VW”) alleging that the car manufacturers conspired to halter the development of clean emissions technology for passenger cars running on petrol and diesel.[1]
Following a dawn raid in 2017, the Commission opened a formal investigation in September 2018 into meetings among BMW, Daimler, VW, and VW-owned Audi and Porsche (referred to as the “circle of five”), in which they allegedly discussed the development of technology to reduce harmful car exhaust emissions. In the SO, the Commission takes the preliminary view that the car manufacturers, in an effort to reduce development costs, effectively agreed to (i) limit the components and effectiveness of a certain cleaning technology for diesel emissions (so-called selective catalytic reduction systems), and to (ii) avoid or delay the introduction of a cleaning technology for petrol emissions (so-called “Otto” particle filters). By doing so, they conspired to restrict competition on innovation for these two technologies in violation of Article 101(1)(b) TFEU, and—despite the technology already existing—deprived consumers of the availability of more environmentally friendly cars.
This investigation is conducted in the aftermath of the VW emissions scandal of 2015, in which VW stood accused of cheating emissions tests— prompting worldwide litigation. The investigation also follows the €2.93 billion fine imposed by the Commission on truck manufacturers MAN, Volvo/ Renault, Daimler, Iveco, and DAF in 2016 for inter alia colluding on the timing for introducing emission technologies for medium and heavy trucks to comply with new European emission standards.[2] By contrast to the latter, the present case does not have a price-fixing element and is focused solely on the slowing down of technical development—a seemingly novel stand-alone theory of harm in EU cartel enforcement.
While discussions about price or pricing-elements have become universally recognized as unlawful and strictly off limits, competitors are typically allowed to discuss technological and legislative developments to the extent they do not entail the exchange of competitively sensitive information and more generally lead to a restriction of competition. For example, competitors commonly discuss, e.g., in industry or trade association meetings, their position on a legislative proposal relevant to their industry, how to prepare for compliance, and whether to intervene in the process by engaging external consultants or counsel. Genuine forms of cooperation between companies aimed at improving product quality and innovation, including R&D joint ventures, continue to not raise concerns under competition law.[3]
[1] Commission Press Release IP/19/2008, “Antitrust: Commission sends Statement of Objections to BMW, Daimler and VW for restricting competition on emission cleaning technology,” April 5, 2018.
[2] Trucks (Case AT.39824), Commission decision of July 19, 2016.
[3] Commission Press Release IP/19/2008, “Antitrust: Commission sends Statement of Objections to BMW, Daimler and VW for restricting competition on emission cleaning technology,” April 5, 2018.