EU Imposes €458 Million in Fines on Automakers for Long-Running Recycling Cartel

The European Commission (EC) has imposed hefty fines totaling €458 million (approximately $495 million) on 15 car manufacturers and the European Automobile Manufacturers’ Association (ACEA) for their involvement in a long-standing cartel that suppressed competition in the recycling of end-of-life vehicles (ELVs).

According to the EC’s press release, the automakers and ACEA colluded for over 15 years to avoid paying car dismantlers for processing ELVs and to manipulate recycling-related information. Notably, Mercedes-Benz would have been liable for a €35 million fine, however, it was granted full immunity from the penalties after it revealed the cartel’s existence to the EC under the leniency program.

The fines, levied on some of the world’s largest automakers, include €127.69 million for Volkswagen, €81.46 million for Renault-Nissan, and €74.93 million for Stellantis. Other companies fined in the investigation include Ford, GM, Toyota, Honda, Hyundai/Kia, Mazda, Mitsubishi, BMW, Jaguar Land Rover, Volvo, and Suzuki. The ACEA, which “organized numerous meetings and contacts between car manufacturers involved in the cartel”, has also been fined €500,000 for its role in facilitating the cartel. 

The investigation revealed that these companies participated in practices to avoid competition in the recycling of ELVs by agreeing not to pay dismantlers for their services. The Commission noted that the companies “agreed not to promote how much of an ELV can be recycled, recovered and reused and how much recycled material is used in new cars.” 

“Their goal was to prevent consumers from considering recycling information when choosing a car, which could have reduced pressure on companies to go beyond legal requirements,” the Commission noted.

The Commission emphasized that under EU Directive 2000/53/EC on ELVs, the last vehicle owners must be able to dispose of ELVs free of charge, with car manufacturers bearing the cost if necessary. Consumers are also required to be informed about the recycling performance of new vehicles.

Teresa Ribera, EC Executive Vice-President for Clean, Just and Competitive Transition, commented: “These car manufacturers coordinated for over 15 years to avoid paying for recycling services, by agreeing to not compete with each other on advertising the extent to which their cars could be recycled, and by agreeing to remain silent on the recycled materials used in their new cars. We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products.”

In this press release issued alongside the penalties imposed on automakers for anti-competitive practices, the Commission outlined new measures aimed at advancing the EU’s green transition. Notably, it has proposed funding incentives to encourage the deployment of recharging infrastructure for electric vehicles (EVs) across the European Union. It has also launched a fact-finding initiative to investigate how European industries procure and recycle critical raw materials used in the production of electric vehicles.

Source: European Commission