Antitrust Regulators Worried German Auto Industry Has Been Running Secret Cartel For Decades
Government authorities are concerned that Germany’s automakers have been running one of the biggest CARtels in history. Allegedly active since the 1990s, automakers used secret working groups to remain in cahoots on decisions regarding technical issues, suppliers, and cost suppression. The groups may have even set the table for Volkswagen’s diesel emissions scandal by encouraging regulatory cheating.
Major manufacturers had apparently agreed on the size of the tanks containing AdBlue, Germany’s preferred diesel treatment fluid to reduce exhaust emissions, and decided the units should be small to keep fluid prices up. When the entire system turned out to be insufficient in meeting regulatory guidelines, illegal software manipulation became the alternative solution.
At least that’s how Der Spiegel framed the news when it broke on Friday. Meanwhile, government authorities aren’t ready to issue any concrete accusations. “The European Commission and the Bundeskartellamt have received information on this matter, which is currently being assessed by the Commission,” a spokesperson said on Saturday. “It is premature at this stage to speculate further.”
Der Spiegel reported that Germany’s antitrust authorities had been investigating Volkswagen over the possible manipulation of steel prices. But, while that probe was underway, evidence of an illegal collusion within the auto industry emerged. VW essentially outed itself to committing anti-competitive behavior in a letter to cartel authorities on July 4th. Early information stemming from the letter seems to indicate that sixty industry committees, made up of about 200 employees, debated vehicle development, engines, transmissions, brakes, exhaust treatment systems, and more.
Any company found guilty of breaching the European Union’s cartel could face fines resulting in as much as 10 percent of their global turnover.
Volkswagen, BMW, Audi, and Porsche have yet to respond to the accusations.
[Image: Volkswagen]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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I'll stick with the Koreans; they're pretty honest.
Now we know where the mythical 100-mpg carburetor is kept... it's in Germany!