Top carmakers including Jaguar Land Rover and BMW have been hit with a €458m (£383m) fine by UK and European regulators after operating an illegal vehicle recycling cartel for more than a decade.
On Tuesday, the European Commission said it was imposing fines on 14 manufacturers and a industry trade association over the end-of-life vehicle recycling scheme, which broke EU competition law.
UK regulators, who separately imposed fines of £78m, said manufacturers and industry trade bodies had created a “gentleman’s agreement” to “avoid a competitive race” on recycling.
In total, 14 manufacturers were fined including Stellantis, Mitsubishi, Ford, Honda, Hyundai, Jaguar Land Rover, Mazda, Renault Nissan, Opel, General Motors, Suzuki, Toyota, Volkswagen and Volvo. Mercedes-Benz, which was also involved, avoided a fine from both the UK and EU authorities because it alerted them to the behaviour.
End-of-life vehicle recycling is when cars are dismantled and processed for recycling and disposal once they are no longer fit for use.
The investigations found that the carmakers agreed not to pay car dismantlers for processing the end-of-life vehicles – despite a law requiring them to pay scrap metal dealers for recycling the cars.
The law was introduced to allow car owners to dispose of cars free of charge, pushing the costs of recycling onto the manufacturers.
Most manufacturers also agreed not to share what percentage of recycled material was being used in new cars.
Teresa Ribera, European competition chief, said: “We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmentally friendly products.”
The European Commission added: “Their goal was to prevent consumers from considering recycling information when choosing a car, which could lower the pressure on companies to go beyond legal requirements.”
The EU, which raided the manufacturers three years ago, said the cartel took place from May 2002 to September 2017. It said the European Automobile Manufacturers’ Association (ACEA), the trade body, had organised numerous meetings between the companies.
Volkswagen’s fine was the biggest at €128m, followed by Renault Nissan at €81m, Stellantis at €75m and Ford at €42m.
The British investigation also noted that the UK’s Society of Motor Manufacturers and Traders was involved in the illegal agreements.
Lucilia Falsarella Pereira, of the CMA, said the fines “show our commitment to taking action when competition law is broken. In accordance with our leniency policy, we’ve given discounts to those who came forward with information and co-operated at an early stage, which helps to get the swiftest outcomes.”
UK regulators hit 10 manufacturers and two trade associations with fines. Ford was fined £19m, Volkswagen £14m and BMW £11m.
Mercedes-Benz also avoided a fine from the UK for alerting them to the illegality. Both regulators said all the companies admitted to their involvement in the cartel.
The ACEA said: “While acknowledging the infringement, which should not have occurred, we note that it neither produced consumer harm nor reduced innovation. Manufacturers have continued to improve car recyclability and, today, almost 90pc of the parts and materials in cars scrapped in the EU are reused and recycled.”
