EU Commission & CMA Take a Stand Against Auto Industry’s Anti-Competitive Recycling Practices

Key Takeaways

• €458 Million Fine: The European Commission has imposed €458 million in fines on 15 car manufacturers and ACEA for suppressing competition in vehicle recycling and recycling-related advertising.
• Whistleblower Protection: Mercedes-Benz avoided a €35 million fine after revealing the cartel, demonstrating the value of cooperation under the leniency programme.
• Cross-Border Enforcement: The CMA in the UK issued over £77 million in fines for similar anti-competitive conduct, showing robust cross-border regulatory cooperation.
• Industry Accountability: The case underscores the need for the automotive sector to prioritize transparency and sustainability or face increasing regulatory pressure.

Deep Dive

The European Commission has handed down €458 million in fines to 15 major car manufacturers and the European Automobile Manufacturers' Association (ACEA) for participating in a cartel that sabotaged efforts to recycle end-of-life vehicles (ELVs). Meanwhile, across the English Channel, the UK's Competition and Markets Authority (CMA) has made its own mark, uncovering similar anti-competitive behavior in the advertising of recycling-related features of new cars and the recycling of old ones.

This isn’t just a corporate scandal; it’s a bold reminder that when big industries cut corners, they not only break the law—they also hinder progress toward a more sustainable future.

For over 15 years, a group of auto giants, including household names like BMW, Ford, Toyota, and Volkswagen, worked together in a carefully orchestrated scheme to suppress both recycling efforts and consumer awareness. Their plan? Keep things quiet. They agreed not to pay car dismantlers for processing end-of-life vehicles. Why? They claimed that recycling old cars was profitable enough to avoid compensation.

But it didn’t stop there. These companies also agreed to hide the truth from consumers. They kept quiet about how much of their cars could actually be recycled or reused. Why would they want to advertise how “green” their vehicles were? Because promoting that would put pressure on them to improve their recycling efforts, and they weren’t having it.

The result? The European Union’s rules—requiring manufacturers to take responsibility for the recycling of their vehicles and provide consumers with information on how much of their cars could be reused—were effectively ignored for years.

The Role of ACEA and the Major Players

ACEA, the trade association representing car manufacturers, played the role of the puppeteer in this cartel, organizing secretive meetings and making sure all the manufacturers were on the same page. However, Mercedes-Benz, which wasn’t about to sit back and let this slide, decided to blow the whistle. By reporting the cartel, Mercedes-Benz avoided a fine of €35 million and got off scot-free under the Commission’s leniency programme.

Other companies that cooperated with the investigation, like Stellantis, Mitsubishi, and Ford, received reduced fines for their efforts. For Stellantis, this reduction was a hefty 50%, which speaks volumes about the importance of cooperation in uncovering cartel behavior.

When it came to penalties, the fines were hefty, reflecting the scale of the damage done:

• Volkswagen: €127.7 million
• Renault/Nissan: €81.5 million
• Stellantis: €74.9 million (with a 50% reduction for cooperation)
• BMW: €24.6 million

The CMA’s Parallel Investigation

In a parallel move, the CMA launched its own investigation into anti-competitive practices, specifically focused on the advertising of recycling-related features in new cars and the dismantling of old ones. In the UK, the investigation led to fines totaling over £77 million, proving once again that the auto industry can’t escape scrutiny—whether they’re on one side of the channel or the other.

The road wasn’t smooth for the CMA, though. BMW and Volkswagen challenged the CMA’s authority, particularly in relation to their information requests. However, the Court of Appeal sided with the CMA in January 2024, affirming their ability to crack down on cross-border cartels. It was a major win for competition regulators.

The real takeaway here is not just the fines. Sure, €458 million is a big number, but what this case really highlights is the fact that the automotive industry needs to change its ways—starting with transparency. In the past, companies could hide behind clever marketing, cutting corners, and keeping customers in the dark. But today, that’s no longer an option.

As Teresa Ribera, the European Commission's Executive Vice-President for Clean, Just, and Competitive Transition, pointed out, “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."

This case sends a strong signal: regulators will no longer let companies hide behind old practices. The EU and UK are both serious about making sure that businesses not only follow the law but also contribute to the environmental goals of the future.

Time for the Industry to Wake Up

So, where do we go from here? The automotive industry has a choice to make. It can continue to resist change, stick to outdated, unsustainable practices, and get caught in the crossfire of ever-tightening regulations. Or it can take this moment to shift gears—embracing transparency, sustainability, and fair competition.

The EU and the CMA have both shown that they will hold manufacturers accountable for bad behavior. And while this case may be a major setback for the companies involved, it could also be the turning point for an industry that’s been slow to embrace the future.

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