Reed Smith Client Alerts

On 8 July 2021, the European Commission (Commission) imposed a €875 million cartel fine on car manufacturers for restricting competition in emission cleaning for new diesel passenger cars. It is the Commission’s first cartel decision ever to be based solely on a restriction of technical development (as opposed to ‘classic’ cartel behaviour such as price fixing, market sharing, customer allocation or bid-rigging). It is also the most recent example of the Commission using its antitrust enforcement powers against business practices that risk jeopardising the EU’s Green Deal and sustainability goals. This has implications for businesses’ entire product cycle, ranging from the sourcing of input products and the phasing out of unsustainable products, to the development and manufacture of goods, and their subsequent distribution.

Businesses across a wide range of industry sectors are under significant pressure from regulators, shareholders and investors to meet the EU’s sustainability goals. To achieve this, they will continue to cooperate – and increasingly so – with companies active on different levels of the supply chain and with current or potential competitors. While EU antitrust rules generally permit pro-competitive cooperation between competitors on, for instance, R&D and product development where this leads to efficiency gains (e.g., product improvements, and faster development and marketing of products, due to a combination of skills and assets), the boundary between what is permitted and what is prohibited is often blurry.

The Commission’s decision now serves as a clear antitrust warning sign for technical (and other) cooperation that is anti-competitive in nature and not justified by efficiency gains under EU antitrust rules. More than ever, businesses need to focus on antitrust scrutiny and risk management before and while engaging in any sort of technical (or other) cooperation with competing businesses to avoid unwelcome surprises at a later stage.

Our Brussels antitrust team gives an overview of the case and addresses its key implications for EU antitrust enforcement and businesses.