Justice Department Drops Antitrust Probe of Auto Makers Involved in California Emissions Deal -- 2nd Update

Date : 02/08/2020 @ 12:24AM
Source : Dow Jones News
Stock : Bayerische Motoren Werke AG (BMW)
Quote : 44.75  -0.115 (-0.26%) @ 4:35PM
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Justice Department Drops Antitrust Probe of Auto Makers Involved in California Emissions Deal -- 2nd Update

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By Brent Kendall and Timothy Puko 

WASHINGTON -- The Justice Department closed its antitrust investigation of four auto makers that had reached a tailpipe-emissions deal last summer with the state of California, finding no evidence of collusion among the companies.

After examining the matter for several months, the department concluded that the auto makers -- Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG -- didn't engage in conduct that violated U.S. antitrust law, according to people familiar with the matter.

Spokespeople for Ford and BMW confirmed that the Justice Department had dropped the probe, which was reported earlier by the New York Times. The other auto makers didn't respond to requests to comment.

At issue was a July agreement between the auto makers and the California Air Resources Board on fuel efficiency standards, a state-based framework that is at odds with the Trump administration's regulatory approach.

Justice Department officials questioned whether the companies had agreed among themselves on the outlines of the deal with California regulators, and the auto makers received formal civil subpoenas in the fall.

The department launched the investigation amid a heated conflict between the Republican Trump administration and California's Democratic leaders -- one that has played out over several fronts, including health care, immigration and transportation.

In a statement, Democratic California Gov. Gavin Newsom said the investigation was "always a sham -- a blatant attempt by the Trump administration to prevent more auto makers from joining California and agreeing to stronger emissions standards."

"This is a big loss for the president and his weaponization of federal agencies -- and a victory for anyone who cares about the rule of law and clean air," Mr. Newsom said.

The Justice Department's top antitrust official, Makan Delrahim, appeared before the Senate in September and testified that politics played no role in the auto maker investigation, calling the investigation a fact-finding mission.

Environmental rules, especially climate policy, have been at the center of the conflict between California and the White House. Sacramento wants to sharply limit the greenhouse-gas emissions that cause climate change, especially from cars and trucks.

The Trump administration has moved to rescind Obama-era rules that attempted to lower emissions, and to curb California's influence in the auto industry.

The four companies announced a deal in July to support standards set by the California Air Resources Board, betting it was the best way to ensure the dispute didn't lead to two sets of emissions standards in the U.S.

Justice officials believed at the time the deal could effectively restrict competition by potentially limiting the types of cars and trucks the auto companies offer to consumers, people familiar with the department's thinking say.

The Wall Street Journal first reported the investigation last year.

For a time, that investigation had effectively frozen any progress on negotiations to further detail or expand the pact. No other companies have announced interest in joining since the start of the investigation, and several of those that hadn't joined chose to intervene on behalf of the Trump administration in October in a lawsuit over its move to strip California's authority.

The auto makers eventually met with department antitrust officials in person and formally responded to the subpoenas.

--Ben Foldy in Detroit contributed to this article.

Write to Brent Kendall at brent.kendall@wsj.com and Timothy Puko at tim.puko@wsj.com

 

(END) Dow Jones Newswires

February 07, 2020 19:09 ET (00:09 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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