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

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 In September, the state’s authority to set auto mileage standards was revoked.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.

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