Wednesday

23rd Oct 2019

German car cartel case may take long time to prove

  • According to Der Spiegel, Porsche has participated in a cartel with four other German carmakers (Photo: Jaeger-Meister)

It could take months, or perhaps even some years for the European Commission to finish its probe into a possible cartel among five German carmakers.

The commission confirmed it is investigating the allegation that Audi, BMW, Daimler, Porsche, and Volkswagen had colluded in a cartel, an allegation first revealed on Friday by German weekly Der Spiegel.

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EU commission spokesman Ricardo Cardoso said on Monday (24 July) that the commission and the German competition authority “have received, indeed, information on this matter”.

He said the information is “currently being assessed by the commission”, but would not give any additional information.

“It is really premature at this stage to speculate further on any potential competitive concerns and consequences of the specific information,” he said.

Cardoso also did not want to reveal when the commission had first received information on the possible cartel.

“We have information that we are looking at, but I cannot say more on that,” he said.

Meeting since 1990s

According to Der Spiegel's investigation, the commission and German authorities had been informed in July 2016 of secret meetings between the five car companies dating back to the 1990s.

The magazine said that Volkswagen and Daimler had reported the existence of the cartel out of fear that they would have been discovered anyway – companies voluntarily presenting the EU with evidence of a cartel may receive friendlier treatment than the companies partaking in the cartel who tried to keep it a secret.

Last year, truck producer MAN was excluded from a record-breaking fine imposed on truck manufacturers because it had come forward.

The commission fined major European truck companies with a fine of almost €3 billion.

Der Spiegel said the commission had confiscated documents and begun interviewing witnesses. It also said the carmakers did not wish to “speculate” on the magazine's findings, although BMW later publicly said that it flat-out denies the allegations.

Dieselgate

If the information in the German publication is correct, it is not a big surprise that the commission had not yet come forward with its investigation.

The companies reportedly had some 1,000 meetings divided into sixty working groups, which gives the commission a lot to investigate.

It is unclear whether the commission would have publicly announced that it is investigating the possible cartel, if not for Der Spiegel's report.

In the previously-mentioned truck cartel case, the commission announced it had carried out inspections in January 2011. Only around four years later, in November 2014, did the commission publish its statement of objections.

The alleged carmakers' cartel, if proven, would partly explain why the Dieselgate scandal, which broke in September 2015, happened.

For years, carmakers produced diesel passenger vehicles that emitted far beyond the EU pollution limits for nitrogen oxides.

The cars were designed to pass the official laboratory test, but had much higher emission levels during conditions that are not represented in the official test.

According to Der Spiegel, the five German carmakers had meetings on how to pass the emissions tests since at least 2006.

Reportedly, they agreed on the size of a tank containing a certain emissions filtering fluid. This seems to have hampered technological advancement on reducing emissions.

However, it was not just German carmakers that designed their diesel cars to appear cleaner in official tests than real life – US-Italian carmaker Fiat Chrysler Automobiles is also suspected.

Puzzle

On Monday, when asked about the cartel case, EU commission lead spokesman Margaritis Schinas also read a prepared statement.

“Two years into the emission scandal it is crucial for everybody, European consumers, a competitive car industry, and the member states to finally do their job and assume their obligations,” he said.

Schinas noted that the EU commission “will ensure that all pieces of this puzzle – from emissions to consumer protection, internal market, competition rules – all these different puzzles will be addressed, in a way that is comprehensive and makes sense”.

Ministers water down post-Dieselgate reform

The EU commission wanted the power to hand out fines to cheating automakers, but the council limited the instances in which the commission can do so.

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