April 5, 2019 / 9:55 AM / 6 months ago

Top German carmakers charged with blocking clean emissions technology

BRUSSELS (Reuters) - BMW, and Volkswagen face possible hefty fines after EU antitrust regulators on Friday charged them and whistleblower Daimler with colluding to block the rollout of clean emissions technology.

FILE PHOTO: European Competition Commissioner Margrethe Vestager holds a news conference at the EU Commission's headquarters in Brussels, Belgium July 24, 2018. REUTERS/Francois Lenoir/File Photo

In the latest pollution scandal to hit the auto industry, the European Commission said it had sent statements of objections to the German carmakers setting out the charges, nearly two years after carrying out dawn raids at their premises.

It said the collusion occurred between 2006 to 2014 and took place during technical meetings held by the “circle of five”, namely BMW, Daimler and Volkswagen Group’s VW, Audi and Porsche.

“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.

BMW said it would contest the allegations “with all legal means if necessary”.

It also said it was probable the Commission would issue a “significant fine” and it would set aside a provision of likely more than 1 billion euros, hurting first-quarter earnings.

The EU focused on selective catalytic reduction systems, which reduce nitrogen oxides from diesel car emissions, and “Otto” particulate filters that reduce particulate matter emissions from petrol cars.

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.

EU fines could go 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 carmakers’ actions 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 and consumers.

Daimler, which alerted the regulator to the collusion, reiterated it did not expect to be fined as a result of its information.

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

Reporting by Foo Yun Chee, additional reporting by Thomas Seythal in Berlin and Tom Sims in Frankfurt; Editing by Mark Potter and John Stonestreet

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