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BMW against the EU: lonely fighters in the cartel dispute the exhaust gas cleaning

GBMW does not investigate prosecutors – and car manufacturer managers do not have to expect them to be arrested and charged in the US. BMW has not been proven to manipulate emissions, not violations of environmental laws. This is a time when car manufacturers encounter rows of accusations of deception. Some, in particular Volkswagen, have been undoubtedly convicted of fraud.

Sounds like a comfortable location for the big, clean man in the industry. But that is the big problem. In the cartel investigations of the European Commission, BMW is now a bogeyman – unlike the accused, the Munich penalties threaten in the billions.

Because they reject accusations, they had refused themselves in the development of catalysts and tanks for the AdBlue urea solution with competitors. Because they do not want to unpack, they do not make themselves available as mildness like Volkswagen or Daimler. Because BMW is on the point, it was not necessary to cheat or to agree with the competition on the exhaust systems. The own technique is good enough – as has been shown.

Nik Doll – "The pressure of regulations for the car manufacturer is increasing"

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WORLD editor Nik Doll explains the pressure German car manufacturers have and why more and more "things are coming to light that they never thought would be as big as they are today".

But the entries do not interest the European Commission. And there are the statements of the rivals who have jointly violated antitrust laws. The people of Brussels now see it as proven that all German car manufacturers – excluding Opel – have wrongly agreed on emissions control. BMW must now – reluctantly – make provisions for billions.

The reason for the determination is the announcement by the European Commission on Friday, announcing that after months of investigation it is now provisional that BMW, Daimler and VW (Volkswagen, Audi and Porsche) are "against the EU from 2006 to 2014" Cartel facilities by agreeing to restrict competition in the development of technologies for cleaning diesel and petrol car emissions ".

Daimler was the first to appear on the case to benefit from a leniency program. VW had followed with its group brands Audi and Porsche. The companies can now expect mitigation.

5 circle in the sights of the authorities

For the car manufacturer, the provisional decision of the European Commission is another major blow. First came the diesel scandal. It then became apparent that of all the technically leading German car companies hitherto, they had missed the switch to electric drives. This was followed by the Commission's investigation into the exhaust gas cartel. And since German environmental aid is trying to enforce driving restrictions for diesel owners with the help of courts, the companies are only in defense mode. What is a problem. Because they should currently invest their energy and money in the transition to alternative propulsion systems.

However, the European Commission does not impress the problems of the German car manufacturer. It is assumed that they have focused more on storing the combustion engine for as long as possible instead of developing new, clean drives. The agreements in the so-called "circle of five" did not use the best and most environmentally friendly technology in the vehicles. That was a violation of competition law.

Among other things, it should have been decided to install smaller urea tanks. With the AdBlue in it, the exhaust gases from diesel cars could have been cleaned better – if there had been enough urea on board. "This would have deprived consumers in Europe of the opportunity to purchase vehicles with the best available technology," said EU Commissioner Margrethe Vestager.

It is therefore not about price fixing, as is usually the case in cartel accusations, but allegedly about the attempt to circumvent EU environmental legislation.

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VW CEO Herbert Diess a few days ago at the annual press conference of Volkswagen AG

If BMW also acknowledged its debt, the Commission could impose a fine. The cartel, ie the German car industry minus Opel, would have to pay. Because if you show yourself, you will receive a fine reduction, but you cannot challenge the fine in court. In Munich, however, they had decided early on to fight: "The BMW group sees in this process the attempt to align the permitted coordination of industrial positions with the regulatory framework with unauthorized cartel agreements," BMW said.

In fact, at least with regard to emissions control of diesel vehicles, Bavaria is a strong argument on their part: they have used a different technique than the competitors of Daimler and VW. One that works at the usual temperatures in Germany. But that is ultimately not the point. Because an agreement is punishable, not only if all members of the cartel adhere to it, but also if the individual members deviate from it.

Billions provision unavoidable

At BMW, however, the situation is very different: management ensures that there has been no collusion at all. It was only about conformity between industry standards at the meetings of the five manufacturers. Yet there are no more illusions: the fact that BMW Brussels is fined is almost certain.

He must be at the entrance. If BMW were successful within a few years with its opposition to the European Court of Justice, the company would get the money back. In the light of the Commission's decision, management announced on Friday evening "a provision of more than € 1 billion".

If that's enough, that's another question. Because the sums are huge: ten percent of global sales last year, the Commission was able to impose a maximum fine. At BMW that would be almost 8.6 billion euros. The maximum penalty is unlikely to be imposed, says the Commission in the circles of the Commission. Do not go to the pain threshold. But with a fine of at least € 4.3 billion, BMW must expect BMW. That would be more than half the annual profit.

Frank Schwope, NordLB analyst for the automotive industry, expects Brussels to impose one-billion billion fines. "The European Commission will also have to take into account that some companies have already paid billions in the exhaust gas scandal and may still have to pay," says Schwope.

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That's bad news for BMW. The Munich got through almost unscathed. The car manufacturer had deliberately decided to find its way in the exhaust gas cleaning system and installed high-quality systems in the vehicles for many years. They are so efficient that even the critical US environmental agencies had nothing to complain about. BMW uses a combination of different cleaning systems that require relatively little urea. Cheating, fraud, illegal defeat devices – everything is not necessary, says the Munich. As a premium manufacturer you could pay for expensive technology.

This is not crucial for the European Commission. For them, the alleged attempt at collusion counts. The conclusion drawn by the members of the "5er circle" from the discussions was not relevant. BMW could not dispute that the meetings were. There remains the argument that all agreements were admissible. A shaky defense strategy – given two confessions.

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