UK Carmakers Fined Nearly £460 Million Over Cartel In Recycling Practices

Some of the world’s largest car manufacturers and two prominent industry trade bodies have been penalised nearly £460 million for participating in a cartel related to vehicle recycling and advertising claims regarding environmental responsibilities. This action was taken following a coordinated investigation between the UK’s Competition and Markets Authority (CMA) and the European Commission.

A total of fifteen manufacturers along with the Society of Motor Manufacturers and Traders (SMMT) and the European Automobile Manufacturers Association (ACEA) faced significant fines as part of a settlement due to their involvement in this unlawful agreement. The CMA’s three-year investigation uncovered that these manufacturers had colluded to limit competition concerning how they advertised the recyclability of their vehicles.

Among those fined were major brands like BMW, Jaguar Land Rover, Ford, Peugeot Citroen, and Volkswagen. The investigation revealed that these companies had agreed not to compete against each other when reporting the percentage of their cars that could be recycled, thus breaching competition law.

The CMA’s findings indicated that the manufacturers had established a troubling “gentleman’s agreement” to avoid a competitive race in their recycling claims. Violations occurred from May 2002 to September 2017, with many manufacturers explicitly agreeing to refrain from sharing recycling information with their customers.

As part of the regulations, manufacturers are required to provide free recycling services for end-of-life vehicles, often initiated through outsourcing. However, during the period from April 2004 to May 2018, eight manufacturers unlawfully agreed not to compensate service providers for handling the recycling of scrap vehicles, preventing these companies from negotiating fair prices.

This behaviour has been deemed unacceptable as it undermines consumer choice and dampens incentives for car manufacturers to invest in greener initiatives. Mercedes-Benz has notably avoided a fine after it proactively reported its involvement through the CMA’s leniency policy, highlighting the potential benefits of transparency in addressing competition issues.