Justice Department Subpoenas Automakers Over California Emissions Pact

The Justice Department has issued civil subpoenas to the four major automakers’ that voluntary agreed to adopt a Californian compromise on vehicle emission requirements. The antitrust investigation seeks to determine whether or not BMW, Ford, Honda, and Volkswagen were in violation of federal competition laws by agreeing with each other to adhere to stricter emissions standards penned by California.

With the Trump administration working for years to roll back emissions standards, California has been doing everything in its power to maintain its ability to self-regulate and gain support for higher emission standards. Under the agreement with the Golden State, the companies promised to meet annual emission improvement targets of 3.7 percent and defer to the state’s authority to set its own emissions standards.

The DOJ reached out to the carmakers in August to assess whether they had coordinated with each other before agreeing to the state’s adjusted guidelines — as any previous communications on the issue would raise the possibility of an antitrust violation. Congressional Democrats have also bashed the investigation as being too partisan, while the EPA continues to claim the only tenable solution is one national standard.

Mary Nichols, chair of the California Air Resources Board, has previously stated that the state worked with each automaker individually, suggesting that all parties were careful to not to break any rules. But her assurance doesn’t seem to have been sufficient, since the DOJ is now issuing civil investigative demands.

According to The Wall Street Journal, the subpoenas don’t actually obligate the automakers to hand over internal documents but does force them to answer any questions relation to collusion directly. If evidence emerges later that they were lying, it can be used against them — because they definitely aren’t going to say “of course we colluded.”

That leaves little incentive for them to fess up to any misdeeds, but we have seen manufacturers confess to cooperating illegally in the past in the hopes of receiving a lesser penance. Of course, that only goes if they actually violated antitrust laws.

From The Wall Street Journal:

The Justice Department’s top antitrust official, Makan Delrahim, in Senate testimony in September said the probe wasn’t political, describing the investigation as a fact-finding mission. He said companies can’t cooperate among themselves, even to advance socially laudable goals.

BMW and Honda said they are cooperating with the department. Spokesmen for Ford, Volkswagen and the Justice Department declined to comment.

[Image: Michael Vi/Shutterstock]