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BMW Raided in Collusion Probe as Daimler Blows Whistle to EU

Oct. 20, 2017
The raid is part of a probe into whether talks on technical standards between Volkswagen AG, BMW and Daimler may have allowed them to collude on pricing.

BMW AG said it was raided by European Union antitrust watchdogs this week as the EU ramped up a probe into the German car industry following reports that carmakers colluded on technology for decades.

News of the search marks the latest development in a probe sparked earlier this year. Daimler AG reported a possible cartel as part of the EU’s leniency program that allows firms to dodge fines for being the first in line to report wrongdoing, CFO Bodo Uebber said earlier on Oct. 20, confirming previous press reports.

EU Competition Commissioner Margrethe Vestager said in September that her officials are checking whether “completely legal cooperation” between German car companies isn’t being confused with an illegal cartel. Her comments came after Germany’s Der Spiegel reported in July that talks on technical standards between Volkswagen AG, BMW and Daimler may have allowed them to collude on pricing.

The three carmakers worked together on a wide range of technology including discussing the size of tanks for AdBlue, a liquid that helps neutralize pollutants in diesel exhaust, according to Der Spiegel.

“The raid on BMW alone seems to suggest that it isn’t cooperating whereas the other companies are and have provided the EU with information, making a raid there useless,” said Adrien Giraud, a lawyer at Willkie Farr & Gallagher LLP.

Vestager’s department at the European Commission said in a separate statement that the inspection, begun on Oct. 16, related to concerns that several German car manufacturers may have violated EU antitrust rules that prohibit cartels and restrictive business practices.

The commission didn’t give details of the products or companies under investigation beyond saying that one company had faced unannounced inspections and that Daimler was cooperating under the EU’s antitrust leniency program for whistleblowers.

BMW spokesman Glenn Schmidt confirmed the raids and said the company is cooperating. VW spokesman Nicolai Laude said the company wasn’t raided. He declined to comment further.

Firms who are the first to own up about a cartel can be eligible for a full reduction on any EU fines. There are discounts for other companies that help regulators with the probe or who agree to settle the case, which means they can’t appeal to the EU courts.

Daimler may escape fines because it appears to have beaten Volkswagen to blowing the whistle, Sueddeutsche Zeitung reported in July.

The EU antitrust probe is the latest scandal to the industry already battered after Volkswagen admitted two years ago that some of its cars were fitted with software that allowed it to cheat on emissions tests.

By Gaspard Sebag, Elisabeth Behrmann and Stephanie Bodoni

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