BMW and VW Fined Nearly $1 Billion in Emissions Collusion Case

In a major incident highlighting collusion in the automobile industry, two of the largest car manufacturers in the world, BMW and Volkswagen (VW), have been penalised by the European Union (EU) for their involvement in an emissions scandal. The EU has fined these companies nearly $1 billion due to a breach of antitrust laws related to reduced vehicle emissions.

Dieselgate: The Scandal That Started It All

In 2015, Volkswagen was caught rigging their diesel cars with emission-cheating software, also known as defeat devices, which made their cars pass laboratory tests while they released up to 40 times the legal limit of nitrogen oxide in the real world. The scandal not only rocked the automotive industry but also affected consumers' trust in the company. According to analysts, VW's actions caused a dent in the reputation of German manufacturing, as the country is known for producing high-quality machinery and engineering.

As a result of the scandal, VW was found guilty of violating environmental and consumer protection laws in various countries worldwide and had to pay billions of dollars in diesel claims and fines. The company was also ordered to buy back millions of diesel cars affected by the defeat devices. In some instances, VW even had to offer customers a cash payout to resolve lawsuits arising from the scandal. The debacle nearly caused VW to go bankrupt and resulted in the resignation of the company's top executives, including its CEO.

Similarly, in 2018, BMW announced that it would recall 11,700 diesel cars, citing excess nitrogen oxide emissions that exceeded EU criteria. This recall came after real-world testing on BMW emissions showed that they emit significantly higher pollution levels than what is allowed by current EU regulations. To learn more about the issue, visit https://www.claimexperts.co.uk.

Diesel Emissions

Diesel emissions, specifically nitrogen oxide and particulate matter, have been an ongoing issue in the automotive industry for decades. Despite diesel cars boasting better fuel economy and lower carbon dioxide emissions than their gasoline counterparts, they produce significantly higher levels of nitrogen oxide and particulate matter, resulting in adverse environmental and health impacts.

According to the World Health Organization, air pollution caused by particulate matter and nitrogen oxide is responsible for the death of over seven million people globally every year. These particles can also cause respiratory problems such as asthma, lung cancer, and stroke. Given the severe health and environmental impact, regulations on diesel emissions have been steadily increasing worldwide.

Collusion on Emissions-Reducing Technology

The EU's recent $1 billion fine on BMW and VW resulted from the two companies conspiring to restrict the development and implementation of emission-reducing technology, thus violating antitrust laws. The collusion involved a selective catalytic reduction system that reduces nitrogen oxide levels in car emissions.

Both companies were reported to have held "working group meetings" between 2009 and 2014 where they allegedly discussed technical details of the catalytic systems, agreeing to limit the size of the AdBlue storage tank, a crucial part of the system. This collusion meant that the two companies maintained dominance in the market, effectively avoiding competition from other car manufacturers.

According to the EU, this collusion dramatically impacted emissions reduction technology. It reduced the amount of nitrogen oxide, removing chemicals in diesel cars being used, which harm human health and the environment. This means the emissions technology used in these vehicles did not conform to the strict European emissions requirements. Consequently, more polluting cars were marketed to the public, which were harmful to the environment and breached regulatory standards.

Details of the Fines

The EU's antitrust regulators focussed on two types of wrongdoing by both BMW and VW. Firstly, the two rivals allegedly coordinated searches for suppliers of AdBlue. Secondly, the claim was that they conspired with the specifications for AdBlue tanks, including the placement of the tanks within cars.

Volkswagen agreed to pay £466.8 million for the settlement, while BMW was fined almost £346.8 million. The other car manufacturer involved in the cartel, Daimler AG, avoided penalties as they were the first company to provide information about the collusion, thereby earning immunity from the investigation.

Implications for the Automotive Industry

The fines imposed on BMW and VW have been seen as a signal to the wider automotive industry that regulators will not tolerate any form of collusion or cheating on emissions standards. The fines also reflect growing public and political pressure to reduce emissions and protect public health.

The need for more environmentally responsible practices in the automotive industry has never been higher. Moreover, the EU's attempts to tackle damaging environmental practices have provided a timely wake-up call for manufacturers worldwide.

Public trust and transparency must be at the forefront of industry practices if companies are to avoid future penalties and, more importantly, help their customers transition to more sustainable mobility practices. Consumers have the power to demand more from manufacturers, and companies need to listen to their demands, pushing them closely toward positive change.