EU and UK Impose Hefty Fines on Carmakers for Recycling Cartel
Fifteen major automobile manufacturers penalized for anti-competitive practices related to used car recycling.
On Tuesday, the European Commission announced the imposition of fines totaling €458 million ($494.5 million) on the Automobile Manufacturers' Association (ACEA) and 15 of its member companies for engaging in cartel-like activities concerning the recycling of used vehicles.
The fines stem from the Commission's investigation, which revealed that the manufacturers had engaged in anti-competitive agreements and shared confidential information to inhibit competition in the stripping, scrapping, and recycling of end-of-life vehicles.
Volkswagen was subjected to the largest fine amounting to €127 million, followed by Renault/Nissan with €81.5 million and Stellantis, the parent company of Opel, which received a fine of €75 million.
Other notable fines included €41.5 million for Ford, €25 million each for BMW and Opel, and approximately €24 million for Toyota.
The ACEA itself was fined €500,000 for its role in the cartel.
Mercedes-Benz avoided a €35 million penalty for its participation in the cartel by reporting the illicit activities to authorities.
The Commission's investigation highlighted that the manufacturers had collectively agreed not to advertise their recycling practices, thereby preventing consumers from considering environmental factors in their purchasing decisions and undermining competitive pressure to exceed minimum legal recycling requirements.
European Commission Vice President Teresa Ribera emphasized the seriousness of such anti-competitive practices, stating, "We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmentally-friendly products." Following searches of the manufacturers' offices by authorities in 2022, all implicated companies admitted their involvement in exchange for reduced fines.
In a concurrent investigation in the United Kingdom, the Competition and Markets Authority (CMA) levied fines totaling £77.7 million (€93 million, $100.4 million) on ten car manufacturers and two trade associations for similar anti-competitive conduct.
The companies fined included BMW, Ford, Jaguar/Land Rover, Peugeot/Citroen, Mitsubishi, Nissan, Renault, Toyota, Vauxhall, and Volkswagen.
The CMA concluded that these companies had illegally colluded not to compete in advertising the recyclability of their vehicles and conspired to avoid compensating third parties for recycling discarded cars.
Commenting on the CMA's findings, Lucilia Falsarella Pereira, a senior director at the authority, remarked, "Agreeing with competitors on the prices you'll pay for a service or colluding to restrict competition is illegal, and this can extend to how you advertise your products.
This kind of collusion can limit consumers' ability to make informed choices and lower the incentive for companies to invest in new initiatives." Similar to the EU case, Mercedes-Benz received immunity from the UK fines by bringing the cartel to light.
The fines stem from the Commission's investigation, which revealed that the manufacturers had engaged in anti-competitive agreements and shared confidential information to inhibit competition in the stripping, scrapping, and recycling of end-of-life vehicles.
Volkswagen was subjected to the largest fine amounting to €127 million, followed by Renault/Nissan with €81.5 million and Stellantis, the parent company of Opel, which received a fine of €75 million.
Other notable fines included €41.5 million for Ford, €25 million each for BMW and Opel, and approximately €24 million for Toyota.
The ACEA itself was fined €500,000 for its role in the cartel.
Mercedes-Benz avoided a €35 million penalty for its participation in the cartel by reporting the illicit activities to authorities.
The Commission's investigation highlighted that the manufacturers had collectively agreed not to advertise their recycling practices, thereby preventing consumers from considering environmental factors in their purchasing decisions and undermining competitive pressure to exceed minimum legal recycling requirements.
European Commission Vice President Teresa Ribera emphasized the seriousness of such anti-competitive practices, stating, "We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmentally-friendly products." Following searches of the manufacturers' offices by authorities in 2022, all implicated companies admitted their involvement in exchange for reduced fines.
In a concurrent investigation in the United Kingdom, the Competition and Markets Authority (CMA) levied fines totaling £77.7 million (€93 million, $100.4 million) on ten car manufacturers and two trade associations for similar anti-competitive conduct.
The companies fined included BMW, Ford, Jaguar/Land Rover, Peugeot/Citroen, Mitsubishi, Nissan, Renault, Toyota, Vauxhall, and Volkswagen.
The CMA concluded that these companies had illegally colluded not to compete in advertising the recyclability of their vehicles and conspired to avoid compensating third parties for recycling discarded cars.
Commenting on the CMA's findings, Lucilia Falsarella Pereira, a senior director at the authority, remarked, "Agreeing with competitors on the prices you'll pay for a service or colluding to restrict competition is illegal, and this can extend to how you advertise your products.
This kind of collusion can limit consumers' ability to make informed choices and lower the incentive for companies to invest in new initiatives." Similar to the EU case, Mercedes-Benz received immunity from the UK fines by bringing the cartel to light.
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