BMW
The car maker is part of the investigation into an EU antitrust case.
MunichThe car maker BMW will be for the threatening Penalty in EU antitrust proceedings is expected to set aside more than one billion euros as a provision. This was announced by the company on Friday evening, This will weigh on earnings in the first quarter of 2019.
The Munich Group has, according to findings of the EU competition guardian illegal agreements with competitors Daimler and VW have taken to technologies of emission control and so have avoided competition in the reduction of exhaust gases. This was announced by the European Commission on Friday morning in Brussels on the basis of a preliminary result of the investigation,
BMW will defend itself against the allegations with all legal means. But from the objections of the EU commission BMW also deduces, “that the European Commission is most likely to issue a fine of a significant amount”. This triggers an obligation to recognize a provision in accordance with International Financial Reporting Standards.
As a consequence, the company reduced its expectation of earnings before interest and taxes (EBIT) in the Automotive segment for the current financial year by one to 1.5 percentage points below the previous corridor of six to eight percent. For the consolidated earnings before taxes in the current financial year, the BMW Group continues to expect a significant decline compared to the previous year.
Previously, the Munich had repeatedly rejected the allegations from Brussels. More specifically, carmakers are said to have unauthorizedly agreed to introduce SCR catalytic converters for diesel engines and particulate matter particulate filters for gasoline engines (OPF). These agreements were made at meetings of the car manufacturers in the so-called 5-circles.
Why BMW should hit it particularly hard
Companies have reduced Europe’s innovation competition in these two emission control systems, denying consumers the option of buying more environmentally friendly vehicles – despite having the technology, the competition authorities said. If the suspicion is finally confirmed, it would be a violation of European antitrust law – even if it is not about price collusion.
Once the commission has sent out the often hundreds of pages of files, there is hardly any way to avoid fines. The corporations may once again comment on the allegations before Competition Commissioner Margrethe Vestager makes the final decision. But in the rarest of cases, the Brussels antitrust authorities still allow themselves to be changed.
EU investigations: VW, Daimler and BMW threaten high antitrust fines – the most important questions and answers
The penalties are likely to run into billions if the Commission can prove to corporations unlawful collusion involving millions of diesel and gasoline vehicles over several years. Because the EU Commission takes the affected sales of the manufacturers as a basis.
It could hit BMW especially hard. Daimler and Volkswagen can hope for a discount – or even be spared. Daimler has the status of a “key witness” because the Stuttgart had reported the case in 2014 itself.
After Daimler, VW reported to the EU Commission and delivered in July 2016 own findings from the investigators. This is evident from internal documents available to Handelsblatt. In EU antitrust proceedings, the first leniency trustee can usually count on a full remission of the fine, the following with up to 50 percent.
The BMW Group is still not ready to cooperate with the investigators in this form. “According to the findings of our internal fact clarification, we see no reason to submit a leniency application,” said a spokesman on request. But they will continue to work with the authorities.
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