German Car Cartel Triggers Rat-Out-Race Between Daimler, Volkswagen And BMW – Forbes
One of the aims of the German car-cartel that became public over the weekend was to avoid “an arms race” of AdBlue tank sizes. Strangely, it turned into a race for who rats out whom first. According to a report in the usually well-informed Sueddeustche Zeitung [German], Daimler was first in coming clean with Germany’s and Europe’s cartel watchdogs, and it could avoid a multi-billion fine. Volkswagen came in second, and could get a 50% rebate on the punishment. BMW, one of the least suspicious in the dieselgate scandal, is kept holding the bag.
In case you haven’t been following the developing story, it became known last Saturday that dieselgate grew out of a cartel of Germany’s Big Five automakers, Volkswagen, Audi, Porsche, BMW, Daimler. For two decades, said reports in Spiegel Magazin and Germany’s Handelsblatt financial paper, secret working groups hashed out and decided the most important details of the auto business, including the inadequate size of the AdBlue tanks that could not adequately feed their diesel cars’ exhaust treatment.
As far as the rat-out-race goes, Volkswagen may have thought it was first, but it was not. Volkswagen’s voluntary declaration is dated July 4, 2016, says the report. 10 days before that, Volkswagen’s offices were raided by investigators hot on the heels of a steel cartel, not a car cartel. Trouble was that the car cartel evident in the files investigators carried back to their offices, prompting Volkswagen to come clean in a big hurry.
Daimler declared itself to the authorities “significantly earlier” than Volkswagen, says a report of a research collective of Sueddeutsche and the NDR and WDR broadcasters that now is being carried all over German media.
According to EU law, the first co-operating co-conspirator in an antitrust matter could walk away unpunished. The second one to break the silence would get a maximum of a 50% rebate, but only if “evidence with considerable value-add” will be delivered.
In 2011, the EU Commission raided four makers of heavy trucks: MAN, Daimler, Iveco, DAF, and Volvo/Renault (Volvo had bought Renault’s heavy truck business ten years before.) In 2016, the EU Commission handed down fines totaling €3 billion ($3.5 billion) for price fixing. Acting as a principal witness, Volkswagen Group’s MAN walked away unscathed, while Daimler had to pay €1.1 billion ($1.28 billion).
Daimler had run-ins with the law before. Until 2013, Daimler had a chaperone, the former head of the FBI, as part of a 2010 settlement with the U.S. Department of Justice after an international bribery scandal was uncovered. Freeh charged 25 Million Euro per year for his services, wrote Manager-Magazin. There is no indication that Freeh found out about the decade-long car cartel.