Automakers Plan to Meet with Department of Justice on Antitrust Probe
Automakers make plans to meet with the Department of Justice. (Flickr)
Automakers agreed to meet with the Department of Justice (DOJ) over a new emissions agreement reached with California regulators. Ford Motor Co., Honda Motor Co., BMW AG, and Volkswagen AG are among the companies that stated they will meet the emissions targets set by the California regulators, going against a proposal by the Trump Administration to freeze the national standard at 2020 levels.
Ford, Honda, Volkswagen, and BMW agreed with the California Air Resources Board to improve their fleet averages by 3.7 percent each year. This is a step back from Obama Administration standards, which required each manufacturer to improve their fleet average from about 37 miles per gallon today to more than 50 miles per gallon by 2025. The companies rejected a proposal to freeze the current standard (37 miles per gallon) through 2026.
The antitrust division of the DOJ raised concerns in August that the automakers’ agreement may be in violation of antitrust laws and requested a meeting to discuss the emissions standards.
In a letter addressed to the four companies, the DOJ stated that it would be investigating if the automakers “violated federal competition law by agreeing with each other to follow tailpipe emission standards beyond those proposed by the Trump administration.”
California and the Trump Administration are currently in a standoff over emissions policies. Critics question the launch of the new antitrust probe into the automobile companies.
Senator Amy Klobuchar (D-MN) said the probe “appears to have less to do with protecting competition than with intimidating parties that don’t fall into line with the Trump administration’s plan to relax emissions standards.”
Ankur Kapoor, an antitrust lawyer and partner at Constantine Cannon law firm, said that it was unusual for the DOJ to be investigating this breach in emissions standards. However, he has clarified the DOJ is more likely looking to confirm that the agreement does not violate any competitive concerns, elaborating that it would be “really interesting to see how this develops.”
Automakers expressed concern that the outcome of the antitrust probe and the conflict with the administration could lead to greater uncertainty within the already unstable industry.