£460m in fines for car makers that agreed to not compete on recycling claims in advertising

Ten leading car makers and the British and European automotive trade bodies have agreed to pay fines totalling more than £77 million after admitting breaking UK competition laws, and 15 car makers have been fined a combined £382.7m by the European Commission in a related probe. The UK fines have been levied by the Competition and Markets Authority (CMA), following a three-year investigation into what it ruled was an illegal agreement between the manufacturers not to compete against each other when advertising the percentage of their cars that could be recycled. BMW, Ford, Jaguar Land Rover, Mitsubishi, Nissan, Renault, Toyota and Volkswagen have all been fined by the CMA, as have Stellantis (as the owner of Citroën, Peugeot and Vauxhall) and General Motors (as the former owner of Vauxhall). The UK's Society of Motor Manufacturers and Traders (SMMT) and the European Automobile Manufacturers Association (ACEA) were also fined. Mercedes-Benz was also involved in the agreement but will not incur a penalty because it alerted the CMA to its participation in the scheme. Meanwhile, the European Commission (EC) has fined 15 firms and the ACEA after a parallel investigation into what it called a cartel concerning end-of-life vehicle recycling. Those include the 10 firms fined by the CMA plus Honda, Hyundai-Kia, Mazda, Suzuki and Volvo. Both the CMA and EC rulings centred around two key areas. The first concerned the sustainability information, including recyclability, that manufacturers are legally required to detail in their advertising. That information is required so that potential buyers can consider how environmentally friendly a car is. The CMA found that all the manufacturers in the scheme agreed not to advertise if their vehicles went above the minimum recyclability requirement of 85%. With the exception of Renault, they also agreed not to inform customers about the percentage of recycled material used in vehicles. It's illegal for firms to agree not to compete against each other in such a manner, with the CMA saying it meant customers were unable to fully compare the green credentials of vehicles. The agreement was spelt out in a document called the ELV Charta and was referred to as a "gentleman's agreement". The CMA said this agreement was widely referenced in internal emails, documents and meetings and that some manufacturers even challenged others that they felt had breached it. The scheme ran from May 2002 until September 2017. Most manufacturers were involved for the full period; Jaguar Land Rover joined in September 2008. The second aspect of the ruling concerned the service that manufacturers are required to offer customers to recycle old or written-off, 'end-of-life' vehicles. That process is often farmed out to third parties, but the CMA found that manufacturers created a "buyers' cartel" from April 2004 until May 2018. According to the CMA, eight manufacturers (BMW, Ford, Mercedes-Benz, Peugeot-Citroën, Renault, Toyota, Vauxhall and Volkswagen) agreed that they wouldn't pay companies to handle the recycling of their end-of-life vehicles. As a result, companies providing the service were effectively unable to negotiate prices with manufacturers. The ACEA, the SMMT, Nissan and Mitsubishi joined the scheme in 2006; Jaguar Land Rover joined in 2016. According to the CMA, the ACEA chaired meetings and intervened when manufacturers operated outside the agreements, while the SMMT became involved to settle a number of disputes. Lucilia Falsarella Pereira, the CMA's senior director of competition enforcement, said: "Agreeing with competitors the prices you will pay for a service or colluding to restrict competition is illegal, and this can extend to how you advertise your products. "This kind of collusion can limit consumers’ ability to make informed choices and lower the incentive for companies to invest in new initiatives." The fines issued by the CMA totalled £77,688,917. Mercedes-Benz was granted immunity from prosecution, while several firms applied for leniency and received settlement reductions to their fines. The EC fines were for the same two anticompetitive agreements. Mercedes-Benz was also given immunity by the EC, with a number of firms receiving a reduced sentence. Teresa Ribera, an EC executive vice-president, said: "We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products. "High-quality recycling in key sectors such as automotive will be central to meeting our circular-economy objectives, not only to cut waste and emissions but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe."

main menu

£460m in fines for car makers that agreed to not compete on recycling claims in advertising

Manufacturers and trade bodies hit with hefty anti-competitive fines by both British and European authorities

More from Autocar

Top 10s

Latest car reviews

Top manufacturers

Quick search

Legal bits

About Autocar

main menu

£460m in fines for car makers that agreed to not compete on recycling claims in advertising

Manufacturers and trade bodies hit with hefty anti-competitive fines by both British and European authorities

More from Autocar

Top 10s

Latest car reviews

Top manufacturers

Quick search

We recommend

Legal bits

About Autocar