The European Union has pulled up car manufacturers from Germany allegedly for engaging in collusion for not allowing technology that helps in reduction of harmful emissions from vehicles dissipate for broader use by the auto industry.
Three giants of the German auto industry – Volkswagen, BMW and Daimler, have been identified for this charge by the European Commission on Friday. The allegation against these companies is that they collaborated among themselves to intentionally delay the introduction of two systems for reducing auto emissions between 2006 and 2014.
While it is certainly acceptable that companies would get together and collaborate to enhance their products, it is not acceptable when such collaboration is done to not to compete on quality standards which would better quality, said Margrethe Vestager, the bloc’s top competition official, in a statement.
“We are concerned that this is what happened in this case,” she said. “As a result, European consumers may have been denied the opportunity to buy cars with the best available technology.”
This collusion between the three auto companies took place and got shape at their annual “circle of five” technical meetings, alleged the regulators. Such meetings are typically attended by BMW, Daimler, Volkswagen and its subsidiary brands Audi and Porsche.
There could have been a significant reduction in the harmful nitrogen oxide emissions from diesel cars if one such technology that had been withheld from being implemented had been allowed to come to the market, the Commission said. The other technology that the car cartel allegedly withheld intentionally form being used helps in filtering of exhaust in vehicles driven on gasoline.
“Restricting competition on innovation for these two emission cleaning systems … denied consumers the opportunity to buy less polluting cars,” the EU regulator said in a statement.
These allegations were made after a preliminary investigation and consequent preliminary report by the Commission and the three cars companies would have the chance to respond to the allegations before the Commission. If found guilty of the charges, as much as 10 per cent of the total annual global revenues of the companies may be slapped on them as penalty.
It has been “cooperating extensively” with the Commission and is not expecting to be fines, said Mercedes-Benz owner Daimler. There were no comments available in the media on the issue from BMW and Volkswagen.
The last few years have not been good for the image of the biggest industry of Germany. Ever since the diesel emission suppression scandal involving the largest car maker in the world Volkswagen broke out in 21015, the company has been fined billions of dollars and has delivered a huge blow to its image as well as to the image of the entire auto industry of Germany. Volkswagen accepted to have used software that represented a reduced reading of emissions to pas the strict US emission standard for diesel vehicles. That scandal had also dashed the confidence of a large section of consumers and regulators in diesel technology and resulted in many legal suits against Volkswagen.
(Adapted from Money.CNN.com)