Colluded

Antier-trust: BMW and Volkswagen were fined $1B for colluding to avoid building cleaner tech

Friday, July 9, 2021 by Robinhood Snacks | Disclosures

If Tony Soprano were driving in 2021… he’d pull up in a Volkswagen. European antitrust regulators fined Volkswagen and BMW more than $1B – about 5% of their annual profits – for colluding to avoid upgrading their emissions tech. In this plot, the "conspirators" are Volkswagen, BMW, and Mercedes-maker Daimler.

  • The pact: Between 2009 and 2014, the three German car giants agreed not to compete with each other to develop cleaner, expensive emissions tech. "I won't do it if you don't."
  • The rat: Daimler agreed to blow the whistle on its co-conspirators in exchange for immunity in the EU investigation.
  • The punishment: Severe. VW will pay $590M, BMW will pay $442M, and Daimler would've paid nearly $900M — if it hadn’t squealed.

But this is actually a sequel... Volkswagen’s been busted before. In 2015’s #Dieselgate, VW outfitted cars with software to cheat emissions tests. Since then, VW’s paid $38B+ in fines and fees – but the German auto biz has struggled to clean up its soiled reputation. Now, EU regulators are sending an unprecedented message: no collusion of any kind.

THE TAKEAWAY

EU antitrust just got broader... It’s the first time the EU has used antitrust law to punish companies for suppressing tech innovation, instead of usual no-nos like price-fixing. The three car companies didn't agree to all raise prices at once — that would be OG collusion. Instead, they tried a more creative type of collusion: don't innovate, boost profit. But the EU put its foot down. Antitrust might get broader in the US, too. New FTC leader Lina Khan has said that we need "a new vocabulary" for addressing Big Tech's dominance.