Gas War: Justice Department Drops Antitrust Probe Against Automakers Siding With California

Matt Posky
by Matt Posky

The United States Department of Justice has ended its investigation into Ford, Honda, Volkswagen, and BMW over a presumed antitrust violation stemming from a deal they made with California to adhere to regional emission rules. Their agreement technically circumvents the current administration’s plan to freeze national emissions and fuel economy standards — established while President Obama was still in office — at 2021 levels through 2026. Under the California deal, the automakers promised to comply with pollution and gas mileage requirements that are more stringent than the federal standards suggested in the rollback proposal.

But the probe also looked like retaliation from the Trump administration against automakers publicly siding with the state causing the most trouble in the gas war. Under the deal, the automakers promised to comply with pollution and economy requirements that are tougher than proposed federal standards. Despite the corporate promise being as empty as an Oscar speech, it was still an affront to the current administration’s efforts to tamp down lofty efficiency targets put in place just days before it came into power.

While the Justice Department hasn’t explicitly said why it closed the investigation, it’s presumed that it simply didn’t find anything that it felt violated antitrust laws. California Governor Gavin Newsom said on Friday that he wasn’t surprised by the decision, stating that the “trumped-up charges were always a sham, a blatant attempt by the Trump administration to prevent more automakers from joining California and agreeing to stronger emissions standards.”

Frankly, we don’t even think the two sides are having the same argument anymore.

California has focused on combating climate change and pushing new technologies while the Trump administration said it’s committed to maintaining jobs, lowering the cost of automobiles via deregulation, and providing consumers with choice. They’ve both been jerks about getting their own way, too. However, the validity of their respective arguments likely hinges upon your own personal perspective.

California offered tons of pushback against the whole rollback thing, going to great lengths to ensure its continued self-regulation while getting as many other states to adhere to its targets as possible. In September, the state’s authority to set auto mileage standards was revoked. The issue will likely be tied up in federal courts for years, as the Golden State isn’t going to go down without a struggle — and has been extremely litigious throughout.

Since the rollback proposal still has not been finalized, it’s not clear how drastic it will ultimately be. The Environmental Protection Agency previously suggested halting existing efficiency mandates in 2021 (with previous drafts issuing the freeze a year earlier), with nothing set in stone. The president said in December to expect the final draft within the next 12 months, noting that he anticipated continued legal problems from California.

Now that seems like a very safe assumption.

[Image: CC7/Shutterstock]

Matt Posky
Matt Posky

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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  • 28-Cars-Later Seville - LS400Bhp 295 250Ft-tq 280 260Reliable No Yes
  • 28-Cars-Later No, and none of you should be either.
  • Arthur Dailey No.
  • Arthur Dailey My father had multiple Northstar equipped vehicles. He got one of the first Northstar equipped STS's in Canada and continually drove STS's on one year leases for nearly a decade. One of them did 'crap out' on him. It went into 'limp' mode and he drove it to the nearest GM dealer. The vehicle was about half way through its lease, and he was in cottage country (Muskoka). GM arranged to have it flatbedded back to Toronto. He rented a vehicle, drove it home and then took delivery of a new STS within about 4 days. There were no negotiations regarding repairs, etc. The vehicle was simply replaced. Overall he was pleased with the performance of these vehicles and their engines. We also found them a pleasant environment to be in, with more than enough power.
  • Bd2 If they let me and the boyz roll around naked in their dealership I'll buy a Chinese car.
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