► EU and UK fine car makers millions over recycling scandal
► Car firms formed ‘cartel’ to not reveal recycling information
► Volkswagen faces largest fine of £104m
Fifteen leading car manufacturers have been fined a combined £460m for colluding and forming a ‘cartel’ to withhold car recycling information on their vehicles and reduce subsequent competition.
Parallel investigations by the European Commission and the UK’s Competition and Markets Authority (CMA) found key car makers such as Volkswagen, Stellantis and Jaguar Land Rover had formed a ‘cartel’ and ‘illegally agreed’ not to advertise if their cars went above the minimum recycling requirement of 85 per cent. Other firms involved include BMW, Ford, Mitsubishi, Nissan/Renault and Toyota.
Similarly, the three-year investigation found carmakers (except for Renault) worked together to not share the percentage of material that could be recycled, recovered or reused in their new cars, meaning there was no competition between them. It’s a practice the European Commission and CMA deem illegal because customers were unable to compare the green credentials of the cars they were buying, which could have persuaded their buying decision.
Most manufacturers took part in this ‘cartel’ between May 2002 and September 2017, with Jaguar Land Rover joining in September 2008. Automotive trade bodies, the Society of Motor Manufacturers and Traders (SMMT) and the European Automobile Manufacturers’ Association (ACEA) have also been fined for helping to facilitate this illegal car recycling activity, including chairing meetings and intervening when manufacturers had acted outside the agreed terms of the group.
Elsewhere, eight manufacturers, including BMW, Ford and Toyota, have also been fined for what the investigations refers to as a ‘buyers’ cartel’, whereby they agreed between themselves not to pay external companies to handle the end-of-life vehicle recycling, believing they could profit from dismantling their cars. It’s a service that carmakers must offer customers for recycling their old or written-off vehicles, and meant that companies providing this service on behalf of car makers were unable to negotiate at all with the car manufacturers.
Mercedes, while involved in the illegal cartel, has managed to avoid fines altogether as it exposed the group to the Commission and CMA’s investigation and therefore escapes penalty as part of the authorities’ ‘leniency policy’. A reduction in fines was also granted to Stellantis, Mitsubishi and the SMMT for approaching the CMA for leniency during the investigation and for their cooperation.
In total, manufacturers were fined €458 (£383m) by the European Commission and £78m by the CMA.
Volkswagen faces the largest financial penalty, with a fine of €107m (£89m) imposed by the Commission and £15m by the CMA.
In a statement, a Volkswagen Group spokesperson said: “Volkswagen Group UK (VWG) notes today’s decision of the UK Competition and Markets Authority. VWG has cooperated fully with the CMA throughout its investigation and remains committed to ensuring full regulatory compliance.”
Renault and Nissan also face huge fines of €81m (£68m) and £10m respectively, Ford’s fine of £19m was the largest imposed by the CMA in the UK.
All manufacturers and trade bodies have now agreed to pay the CMA the fines, with all funds required to be paid by June 2.
Though the European Commission and CMA’s investigations ran in parallel, firms such as Honda, Hyundai and Kia, Mazda, Suzuki and Volvo only face EU fines and not in the UK.
We will continue to update the story as it develops.