BMW
In the ad-blue antitrust case, Bayern did not offer leniency.
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Munich, Brussels Twelve months – Margrethe Vestager still has that much time. Her term of office as EU Competition Commissioner will end in October 2019, and until then the Dane, according to industry circles, would like to conclude a special procedure: the investigation against the German automakers about possibly illegal cartel agreements. Vestager has come out with her feisty actions against giants like Apple or Google developed a reputation not to be afraid of big names. She would like to consolidate this reputation.
Twelve months are not much in an extensive investigation, as opposed to Vestagers officials BMW, Daimler. VW. Audi and Porsche have strained. In the meantime, the team is concentrating on two areas: collusion of the five-circle in the exhaust gas cleaning of diesel vehicles and particulate filters for gasoline engines. But the investigators would move faster if all companies cooperated fully.
The Commissioner clearly sees room for improvement for one of the participants: BMW, Asked about Munich’s willingness to cooperate, Vestager told Handelsblatt: “Companies react differently – some cooperate, others do not. That is the nature of a cartel. “It is hardly possible to be much clearer when a competition commissioner carefully weighs her words for legal reasons.
BMW does not want to comment on the state of the proceedings and the hidden allegation. The Group has repeatedly emphasized its full cooperation with the authorities. But unlike its competitors from Stuttgart and Wolfsburg, BMW has not served the Brussels authority as a key witness.
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Daimler In 2014, the investigation started with confidentially submitted documents to the discussion circles of the manufacturers, Volkswagen moved later with a separate leniency application. Both corporations may therefore hope for a significant reduction in a penalty.
The car cartel
BMW is not ready for this step yet. The Munich refusal has a significant impact on the proceedings. On the one hand, the Brussels officials do not receive the hoped-for relief of their investigation work. On the other hand, according to cartel experts, BMW also signals that it would not be willing to make a possible comparison between the Commission and the companies that are suspected of being caught. For the Brussels authorities, however, settlement would only be a real relief if all the accused were involved.
For the time being, the door to a settlement that has a negative impact on competition is likely to remain closed for the three companies involved. According to informed sources, the Commission will list its objections in the first months of 2019 and send them to the companies. The companies then have another opportunity to comment on the allegations before the Commission takes its decision.
BMW sees itself according to industrial circles not in a position to still appear as a key witness: the group simply have no documents that could justify such a request, it said there. The Commission did not want to comment. In order to benefit from a fine, an accused person must provide the Commission with information that will provide officials with significant added value for their investigation.
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The Munich had been completely surprised when the Antitrust allegations in the summer of 2017 public were. The BMW managers in Stuttgart and Wolfsburg, who have started the investigation with their statements, have not had a good time since then. In mid-October, the antitrust officers searched the BMW headquarters for several days and reportedly took a lot of documents with them.
However, according to experts, empty filing cabinets have not prevented companies in other antitrust proceedings from serving as their key witness. With goodwill and the help of highly paid lawyers, it is still possible to secure the prospect of reduction through such an application.
The company, which first drew the Commission’s attention to the cartel arrangements, can hope for full exemption. The second star witness has 30 to 50 percent discount, the third still at 20 to 30 percent.
Billions possible
But BMW does not seem to be convinced. In Munich one is not aware of any great guilt. The allegation of having illegally agreed with VW and Daimler in the purification of diesel exhaust from nitric oxide, is rejected in Group circles. This is particularly true of the Commission ‘s suspicion that the Five Circle agreed to install only small tanks for the urea solution Adblue, The circles point out that BMW has installed larger tanks than most competitors.
But this alone does not prove the innocence of the Munich, because even the attempt of the agreement can be punishable: lawyers speak of a “purposeful restriction of competition”, in contrast to a “effected”. Vestager suspects the manufacturers have agreed “not to use the best possible technology to clean the emissions of diesel and gasoline cars”.
If the suspicion is confirmed, the companies would not have – as in a classic cartel – the prices agreed. But the corporations would have restricted the innovation competition for cleanest cars – at the expense of customers and air quality.
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However, the commission is thus breaking new ground in law. Proofing is more difficult in this case than price fixing. If the agency should condemn companies on this basis to high fines, they could defend themselves before the European Court of Justice – and would have, according to legal experts, not too bad chances of success.
That is apparently also the calculus of BMW. The concern is trying to defend its hitherto white vest – for example in the diesel affair. Unlike VW, Audi and Daimler, the prosecutors have so far found no reliable evidence that the Munich the Emissions of their diesel vehicles could have been manipulated.
However, the strategy in the current antitrust proceedings is not without risk. Experts believe that possible fines by the Commission could amount to billions due to the large number of cars involved in the collusion. While Daimler and VW in this case because of their leniency applications can hope for high discounts, BMW would have to bear the penalty in full.