EU regulators raid auto giant BMW in German cartel case

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http://maltawinds.com/2017/10/21/eu-regulators-raid-auto-giant-bmw-german-cartel-case/

The bloc’s anti-trust officials have searched the offices of the premium carmaker this week in a probe investigating BMW and four other German automobile firms for suspected anti-competitive practices.

BMW confirmed on Friday that EU anti-trust regulators had searched its offices in Munich this week, after the European Commission had earlier in the day refused to name the company involved.

The EU, in its statement, said that the inspection related to the Commission concerns that several German car manufacturers may have violated EU antitrust rules that prohibit cartels and restrictive business practices.

“Inspections are a preliminary step in investigations of suspected anti-competitive practices. The fact that the Commission carries out inspections does not mean that the inspected companies are guilty of anti-competitive behavior, nor does it prejudge the outcome of the investigation itself,” the Commission added.

A group of leading German carmakers including Volkswagen, Porsche, Audi, BMW and Daimler stand accused of holding illicit meetings since the 1990s to coordinate vehicle technology, cost, suppliers, markets and strategy.

Daimler comes clean

In July, German media reported that the cartel’s secret working groups hashed out and decided the most important details of the auto business, including the inadequate size of the AdBlue tanks that could not adequately feed their diesel cars’ exhaust treatment. One of the aims of the cartel was to avoid “an arms race” of AdBlue tank sizes.

Meanwhile, the cartel case has turned into a race for who rats out whom first. Luxury carmaker Daimler on Friday confirmed it had applied for the status of principal witness in the EU probe.

Daimler chief financial officer (CFO) Bodo Uebber told journalists that the application “principally concerns coordination in breach of anti-trust legislation which was discussed in the press a while ago.” As it was yet unclear whether the EU opened an official investigation into the carmaker, Daimler saw “no need presently to make financial provisions for any possible fines,” Uebber added.

Rat-out-race

According to German media reports, Volkswagen had also attempted to apply for the principal witness status. But Daimler was first in coming clean with Germany’s and Europe’s cartel watchdogs, and it could avoid a multi-billion euro fine.

Volkswagen’s voluntary declaration is dated July 4, 2016, but Daimler’s came significantly earlier. Still, Volkswagen could get a rebate on the punishment.

BMW, one of the least suspicious in diesel emissions fixing, is kept holding the bag. BMW has said from the outset that there is nothing unusual in working with other carmakers on certain components if they “do not contribute to differentiation of the two brands and are therefore not relevant to competition.”

According to EU law, the first co-operating co-conspirator in an anti-trust matter could walk away unpunished. The second one to break the silence would get a maximum 50 percent rebate, but only if “evidence with considerable value-add” will be delivered.