Car makers fined £460m for forming scrap cartel

[Hawkeyethenoo]

Quote

 

Sixteen major European car manufacturers have been fined a total of £460 million by the EU Commission and the UK government for forming an illegal car recycling cartel.

The manufacturers involved in the cartel, which includes BMW, Ford, Mercedes, Stellantis and Volkswagen, agreed they would not pay third party vehicle dismantlers to recycle their customers’ end-of-life vehicles. These are vehicles that are no longer fit for use due to age, excessive wear and tear or irreparable damage.

In the UK, car manufacturers must offer customers a free service for recycling end-of-life vehicles. But the cartel’s actions meant local scrap car recycling businesses – who handle the bulk of this work – could not negotiate prices or turn a profit from the service. This dodgy dealing had been going on for 15 years, from May 2002 to September 2017.

To further control the market, the cartel illegally agreed to hide how much of their vehicles could be recycled. Plus, with the exception of Renault, every car maker agreed to not publicise the amount of recycled material used in the production of their vehicles.

But it gets worse, because the cartel used European Automobile Manufacturers’ Association (ACEA) meetings to coordinate its actions. The ACEA chaired these illegal gatherings – and representatives from the trade body were even pulled in to settle any disputes between manufacturers.

Representatives from the UK’s Society of Motor Manufacturers and Traders (SMMT) also attended these illegal meetings and helped to settle some of the cartel’s disputes. As a result, both the ACEA and SMMT have been fined.

How were the fines allocated?

Volkswagen received the heaviest fines. The sum of the penalties it received from the UK and the EU totalled more than £120 million. The Renault/Nissan Alliance received the next steepest bill – a total figure of more than £77 million.  Stellantis took third place on the podium with fines worth upwards of £67 million.

However, some manufactures got off lightly. Both the EU and UK have leniency policies that grant any businesses involved in cartel activity immunity from penalties, or a reduction in the penalty they’re required to pay, if they rat other members of the cartel out.

Mercedes blew the whistle on Europe’s car recycling cartel, so it managed to avoid fines altogether. Plus, every manufacturer assisted the UK government in its investigation, so they all received at least a 20% reduction in their British fines.

Stellantis benefitted particularly well from this policy in the EU, as it received a 50% reduction for providing evidence that proved the existence of the cartel. Had it not complied with the investigation, it would have received a penalty of €150 million, which would have outstripped Volkswagen’s EU fine by more than €20 million.

https://www.parkers.co.uk/car-news/legal/car-makers-fined-for-scrap-cartel/

 

 

Parcel o' rogues!

[Rustybullethole]

Not entirely sure what i've learned here though am walking away with the knowledge that Mercedes is a grass. 

[eddyramrod]

37 minutes ago, Hawkeyethenoo said:

 

Parcel o' rogues!

You seem surprised.  I'm not.

[grogee]

Bloody hell

[Split_Pin]

You'd think that Companies in the EU and UK would have learned by now that cartels always get rumbled in the end. Plus any other shenanigans.

[castros_bro]

It says cartel agreed not to pay 3rd parties to dismantle their products but then says local scrap dealers who do the bulk of the work....... So which is it ?

[83C]

4 minutes ago, castros_bro said:

It says cartel agreed not to pay 3rd parties to dismantle their products but then says local scrap dealers who do the bulk of the work....... So which is it ?

If I remember correctly back in 2002 it still cost money to dispose of a car, hence why there used to be abandoned cars all over the place. It’s also when it started becoming increasingly difficult/expensive to run an old school breakers yard. The manufacturers having to offer free disposal was supposed to fix this.

[Datsuncog]

I'm slightly confused as well - is it that local recyclers do the recycling work for 'free', as in they earn only what they can get by reselling the scrap materials once separated out (and this can be less than the actual cost of recycling depending on where the metal markets are at), whereas regulations say the manufacturers are meant to pay recyclers a specific fee for dealing with end of life vehicles on their (the makers) behalf?

This feels like one of those stories where I'm missing a crucial detail to make it make sense...

[Datsuncog]

I seem to recall a number of news articles in the late 1990s and early 2000s claiming 'the death of the scrapyard', because manufacturers like BMW were setting up their own recycling plants that looked more like dealer garages, where their end-of-life vehicles were basically unassembled by staff and separated into their component parts for recycling. 

These articles - in publications like Auto Express and the mainstream press - made the point that such places were exclusively for recycling, and unlike scrapyards there would be no way for the public to buy second-hand components from them. Hence the dramatic headlines.

I'm now wondering if there was a loophole in EU regulation whereby independent scrapyards could still take vehicles for breaking/ recycling, with manufacturers then required to pay a recycling fee to these independent yards carrying out the actual work - basically a formal delegation of recycling responsibilities.

Is it that manufacturers then got together as a cartel and decided that none of them would pay independent recyclers for this delegated task, since the breakers already got to sell on the value of salvaged components and the scrap value by weight? 

So effectively the manufacturers washed their hands of their responsibilities to deal with their end of life products, and it cost them nothing.