Volkswagen and BMW fined $1 billion by European Commission for running emissions cartel

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Uwe

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"The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards. But they avoided to compete on using this technology's full potential to clean better than what is required by law,"
Let me see if I understand this correctly: They're being fined because they "colluded" not to make their cars cleaner than they were required to be?

I've said this repeatedly: Car manufacturers are going full-bore to electric cars because they're tired of ever-higher flaming hoops they must jump though in order to satisfy the emissions regulations, and with electric cars, emissions are someone else's problem.

-Uwe-
 
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vreihen

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I think their crack pipe dream is that the power grid will be all solar, wind, unicorn farts, and rainbows by the time the EV cars are ready. How much fuel did those helicopters use last winter spraying de-icer on Texas windmills? Get ready for our new norm, as if the current power grid isn't already at third-world reliability levels..... :facepalm:
 
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stefdds

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I've said this repeatedly: Car manufacturers are going full-bore to electric cars because they're tired of ever-higher flaming hoops they must jump though in order to satisfy the emissions regulations, and with electric cars, emissions are someone else's problem.
Its called the "socialistic squeeze" they don't / can't outlaw it, so they make it as expensive and unbearable as possible. (regulations).

Until, you (the general population) conform...... peasant! (ie people who aren't chauffeur driven).
 
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DV52

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Let me see if I understand this correctly: They're being fined because they "colluded" not to make their cars cleaner than they were required to be?

I've said this repeatedly: Car manufacturers are going full-bore to electric cars because they're tired of ever-higher flaming hoops they must jump though in order to satisfy the emissions regulations, and with electric cars, emissions are someone else's problem.

-Uwe-
@Uwe - without seeking to debate the regulator's decision- the way that I read the link is different.

From my reading, the alleged breach isn't about the fact that the standards were already being met and that the technology wasn't required by law.

Rather, it's about the fact that they (alledgedly) agreed that:

"they avoided to compete on using this technology's full potential to clean better than what is required by law."

Seems to be a rather odd thing for such dominant and experienced car manufacturers to decide - but I guess that the Regulator is saying that an agreement between competitors to NOT do something in the market-place can reasonably be construed as a form of collusion.

As I said, odd thing to agree between competitors - given the sensitivities of the subject matter and given that likely the new technology would probably only be rolled-out anyhow when needed by law to satisfy lower emission standards !! So agreement between competitors not needed!!

Don

PS: I agree with your position on electric car emissions. In fact, vehicles of any type should be measured against whole-of-life emissions which encompass womb-to-tomb processes (i.e. manufacturing/usage/disposal). So emissions are NOT just about travel fuel and the option of incurring more emissions to make a battery that might lower fuel emissions - but ain't going to happen any time soon!!
 
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PetrolDave

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PS: I agree with your position on electric car emissions. In fact, vehicles of any type should be measured against whole-of-life emissions which encompass womb-to-tomb processes (i.e. manufacturing/usage/disposal). So emissions are NOT just about travel fuel and the option of incurring more emissions to make a battery that might lower fuel emissions - but ain't going to happen any time soon!!
Same here I've always argued that anything other than a womb-to-tomb view leads to incorrect conclusions.

A study a few years ago on that basis concluded that a Toyota Prius hybrid actually had a worse womb-to-tomb environmental impact than a Jeep Cherokee (IIRC).
 
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vreihen

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A study a few years ago on that basis concluded that a Toyota Prius hybrid actually had a worse womb-to-tomb environmental impact than a Jeep Cherokee (IIRC).

...and more comfortable seats as well!
 
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Uwe

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I guess that the Regulator is saying that an agreement between competitors to NOT do something in the market-place can reasonably be construed as a form of collusion.
Yeah, an agreement not to do something that isn't required...

So if I and several of my neighbors all agree not to pay more taxes than required, are we engaged in illegal collusion?

Adding more / "better" emissions tech to cars costs money. This either eats into the manufacturers' profits, or it makes a manufacturer's cars more expensive and thus less competitive in the marketplace.

-Uwe-
 
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DV52

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Yeah, an agreement not to do something that isn't required...
Exactly!! As I said, that's what's so odd about the (alleged) agreement .... it "isn't required" - so why would competitors agree???

So if I and several of my neighbors all agree not to pay more taxes than required, are we engaged in illegal collusion?
hmm....... of course it isn't "collusion"!! But that's because you and your neighbors are not competitors and therefore the agreement to pay more taxes cannot be defined as an attempt to fix market behavior (incidentally, I'm sure that your fellow citizens would applaud such an agreement to add further to the coffers of government! :))

But I understand your point entirely - I really do!!

Again with the caveat of the limited information in the link - as I read it, the situation is analogous to a bunch of competitors all agreeing that they won't release a new product onto the market place for which there is currently no demand. In this case the "product" happens to be an emission solution - but it could have equally been anything.

If I'm reading the Regulator's view correctly (big assumption) in the link - the Regulator's position is that it's not important that the emission technology isn't required. What is important is that a decision was made by competitors to jointly act in a way that constricts the normal behavior of a "free-market". This is what I think led to the Regulator's decision the levy the fine. Again, the fact that the "product" related to a thing that currently is not required by the market-place was not relevant (I reckon)


Adding more / "better" emissions tech to cars costs money. This either eats into the manufacturers' profits, or it makes a manufacturer's cars more expensive and thus less competitive in the marketplace.
.

Absolutely no question about your point - I agree entirely !!

And I would add that it's not the Regulator's role to determine the amount of the allowable emission - which I think goes to your point about unneccessarily increasing the cost of car production. That decision is probably made by the elected representatives in each of the countries.

The sole role of the Regulator is purely compliance in a competitive market; to ensure that the market-place dynamic is not skewed, or constrained in a manner that artificially maintains (or increases) manufacturer's profit through anti-competitive behavior.

IMO, the term "free-market" is a grossly misunderstood construct in the 21st Century . In truth, there is nothing "free" in a healthy modern market place and the behavior of the Regulator is as important as the practices of competitors!!

And equally, there is nothing "wrong" with having market-power - particularly in an industry like car manufacture where the set-up costs for investors are so high. What is important though is how that market-power is exercised!

Given that the car manufacturers in the link have not had an exemplary compliance history of late- it should be no surprise that the Regulator's gaze is focused on their practices in the market place!! As I have said, with the compliance sensitivities for which car manufacturers are entirely responsible-for, I would have thought that a modicum of digression would be prudent in any agreement made between them (especially when an agreement "isn't required"-as you say)!! Personally, I have not qualms about the Regulator's decision - other than the $1B fine is probably petty-cash to the conglomerate of firms!

The link says that the manufactures have yet to decide whether to appeal the Regulators decision. This may suggest that this is not a back-and-white matter - or it may mean that thier view is that the Regulator decision may have some merit (let's see what happens)!!
 
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Uwe

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you and your neighbors are not competitors
Are you sure? Do we not compete for the same resources, be they food, fuel, etc? The same services? Jobs?

And I would add that it's not the Regulator's role to determine the amount of the allowable emission - which I think goes to your point about unneccessarily increasing the cost of car production. That decision is probably made by the elected representatives in each of the countries.
I don't know how it works in Australia, and I'm not sure how it works in the EU, but I can tell you for certain that the elected legislators (Congress) in the US do not set emissions limits. Back around 1970, Congress created an agency (the EPA) and gave it the power to set those limits. The agency then proposes regulations with such limits. Those regulations are subject to Congressional review, but it is quite rare for Congress to intervene and block a new regulation.

-Uwe-
 
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vreihen

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California sets emissions limits, and many blue states just copy them. Yes, the same people who cheated by copying your paper in high school now hold elected office...and are STILL copying someone else's work.....
 
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DV52

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Are you sure? Do we not compete for the same resources, be they food, fuel, etc? The same services? Jobs?

hmmm............ on some existential plane, I guess you are correct that every living organism on this fragile blue planet competes for survival. However, the gaze of European Commission that levied the fine is that human invention called the "commercial market place".

So yes, I'm fairly sure that there is a huge difference between decisions made by a consortium of multinational car firms to collectively not act in a particular way in the market and a hypothetical decision by Uwe Ross and his neighbors to pay extra taxes!! :)

Don
 
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