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German automakers formed a secret cartel in the ‘90s to collude on diesel emissions: report

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The car cartel tells us a lot

Porsche Accused Of New Diesel Emissions Manipulation Photo by Sean Gallup / Getty Images

Last week, Der Spiegel published an explosive report alleging that the major German automakers formed a secret cartel in the 1990s to collude on diesel emissions. These companies, including Volkswagen, Audi, BMW, Porsche, and Daimler, met in secret working groups to discuss “the technology, costs, suppliers, and even the exhaust gas purification of its diesel vehicles,” the German weekly reported. The meetings were disclosed to German competition officials in letters from VW and Daimler and viewed by Der Spiegel.

On Saturday, European Union antitrust regulators said they were investigating the cartel allegations, a measure that could result in hefty fines for the companies.

The secret meetings “laid the basis” for the 2015 diesel emission cheating scandal, in which VW was caught installing secret software in more than half a million vehicles sold in the US that it used to fool exhaust emissions tests. The admission of cheating ultimately cost the automaker tens of billions of dollars in fines and legal fees, making it one of the most expensive corporate scandals in history.

Daimler, BMW And Volkswagen Accused In Cartel Scandal Photo by Steffi Loos / Getty Images
Daimler, BMW And Volkswagen Accused In Cartel Scandal Photo by Steffi Loos / Getty Images
Daimler, BMW And Volkswagen Accused In Cartel Scandal Photo by Steffi Loos / Getty Images
Daimler, BMW And Volkswagen Accused In Cartel Scandal Photo by Steffi Loos / Getty Images

Years earlier, VW participated in dozens of secret meetings with its competitors, involving over 200 employees in up to 60 working groups, on how to meet increasingly tough emissions criteria in diesel vehicles. The automakers may have colluded to fix prices of a diesel emission treatment called AdBlue through these working groups, Der Spiegel says. Specifically, VW (which owns Porsche and Audi), Daimler (which owns Mercedes-Benz and Smart), and BMW allegedly agreed to use AdBlue tanks that were too small. AdBlue is a liquid solution used to counteract a vehicle's emissions.

A spokesman for Volkswagen — which owns Audi and Porsche — told AFP Friday that the group would not comment on "speculation and conjecture." BMW has denied the allegations, while Daimler declined to comment.

More recently, Mercedes Benz-parent company Daimler has recalled some 3 million cars for a software update designed to reduce diesel emissions. The German government ordered Daimler to appear before a commission after local media reported that prosecutors were investigating possible emissions cheating by the auto giant.

Meanwhile, VW subsidiary Audi on Friday recalled up to 850,000 vehicles fitted with a similar software update. The news of the recalls, and of the widening scope of the scandal, comes as many global car companies have announced expanded plans for hybrid and electric vehicles.