The European Commission has found that Daimler, BMW and Volkswagen group (Volkswagen, Audi and Porsche) breached EU antitrust rules by colluding on technical development of NO_x aftertreatment systems. The Commission has imposed a fine of €875,189,000 (US$1.04 billion). Daimler was not fined, as it revealed the existence of the cartel to the Commission. All parties acknowledged their involvement in the cartel and agreed to settle the case.

This is the first time that the Commission has decided that collusion on technical development amounts to a cartel. The Commission did not determine whether the car manufacturers complied with EU car emission standards or cleaned to a higher standard than that required.

The Commission noted that there are no indications that the parties coordinated the use of illegal defeat devices to cheat regulatory testing.

According to the Commission, the car manufactures held regular technical meetings to discuss the development of the selective catalytic reduction (SCR)-technology which reduces NO_x emissions from diesel passenger cars through the injection of urea (also called AdBlue) into the exhaust gas stream.

The Commission charged that Daimler, BMW and Volkswagen group reached an agreement on AdBlue tank sizes and ranges and a common understanding on the average estimated AdBlue-consumption. The automakers also exchanged commercially sensitive information on these elements. They thereby removed the uncertainty about their future market conduct concerning NO_x emissions cleaning beyond and above the legal requirements (“over-fulfilment”) and AdBlue-refill ranges.

The Commission said that this means that the automakers restricted competition on product characteristics relevant for the customers.

BMW said that from its perspective, the discussions were aimed at creating a customer-friendly AdBlue filling infrastructure, to be built by the petroleum industry. A marketable filling solution was crucial to enabling wide-scale use of the highly efficient SCR system for exhaust gas treatment. The discussions were not secret; the aims pursued were openly communicated to the petroleum industry and within the VDA and ACEA associations. This was confirmed by the European Commission.

However, BMW added, excessive transparency, such as that during the discussions between the manufacturers, may also be prohibited under competition law—even though this transparency did not disadvantage customers.

The actual fine is levied against Volkswagen Group (€502,362,000) and BMW (€372,827,000). Daimler received full immunity, thereby avoiding an aggregate fine of around €727 million.

In setting the level of fines, the Commission said it took into account the value of the parties' sales of diesel passenger cars equipped with SCR-systems in the EEA in 2013 (the last full year of infringement), the gravity of the infringement and the geographic scope.