European Union antitrust regulators have fined Volkswagen, Stellantis, and 14 other automakers a total of €458 million ($495 million). Tuesday’s penalties come from the manufacturers’ involvement in a vehicle recycling cartel. The European Automobile Manufacturers’ Association was also penalized.
The European Commission’s fines come after an investigation that included raids on several companies in 2022., reports Reuters.
How The Cartel Operated
According to the Commission, the cartel operated from May 2002 until September 2017. The ACEA trade association helped organize the cartel by facilitating meetings and contacts between the competing companies. This allowed for illegal coordination of recycling practices for end-of-life vehicles.
End-of-life vehicle recycling is the process where vehicles unfit for road use are dismantled. The materials are then processed for recycling and proper disposal. EU law holds car manufacturers responsible for managing the costs associated with this recycling when necessary. The system is intended to help owners dispose of their old vehicles free of charge through authorized dismantlers.
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Participants in the cartel agreed to limit competition among themselves regarding vehicle recycling, according to EU authorities. They coordinated to avoid competing in advertising on how recyclable their vehicles are and suppressed information on how much recycled material was used in the production of new cars. Officials argued these actions likely hurt consumer awareness and demand for more environmentally sustainable vehicles.
Furthermore, the cartel also coordinated its approach to car dismantlers. They agreed not to pay these businesses for processing end-of-life vehicles, despite EU laws requiring them to do so.
“We will not tolerate cartels of any kind,” said EU antitrust chief Teresa Ribera. “That includes those that suppress customer awareness and demand for more environmentally friendly products.”
The investigation that led to these fines became public in March 2022. At that time, European Commission investigators carried out unannounced inspections, or raids, at the facilities of several automotive companies and related associations across multiple EU countries. Simultaneously, Britain’s Competition and Markets Authority (CMA) launched its own probe into similar suspicions. Companies including Renault and Opel (part of Stellantis) confirmed visits from investigators then.
BMW is a big public supporter of recycling, and it confirmed it had received a request for information. Likewise, Ford acknowledged it received a notice from the UK’s CMA regarding end-of-life vehicle recycling.
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Fines Issued Following Admissions; Whistleblower Avoids Penalty
Volkswagen suffered the largest individual penalty in Tuesday’s decision at €127.69 million. Stellantis faced combined fines for its brands totaling €99.5 million. The Renault-Nissan alliance was fined €81.46 million, and Ford received a penalty of €41.46 million. Other major global automakers were also implicated and fined, including Toyota, Mitsubishi, Honda, Hyundai, Jaguar Land Rover, Mazda, General Motors, Suzuki, and Volvo.
Mercedes-Benz, however, avoided any fines related to the scandal. The Commission stated that Mercedes-Benz revealed the cartel’s existence to regulators under the EU’s leniency program. By acting as a whistleblower, the company received full immunity from penalties.
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ACEA, the trade association, was handed a separate fine of €500,000 for helping to organize the illicit contacts.
All the carmakers involved admitted their participation in the cartel. In return for their cooperation and admissions, they received a 10 percent reduction in their fines.
Stellantis has issued a statement acknowledging the European Commission’s decision and confirmed its cooperation throughout the investigation. The company added it had already accounted for the fine, which was included in its 2024 full-year results.
Source: Retuers
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