Justice Department Drops Antitrust Probe of Auto Makers Involved in California Emissions Deal -- Update
February 07 2020 - 6:06PM
Dow Jones News
By Brent Kendall and Timothy Puko
WASHINGTON -- The Justice Department has closed its antitrust
investigation of four auto makers that had reached a tailpipe
emissions deal last summer with the state of California, according
to people familiar with the matter.
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, the people said.
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
agreed among themselves on the outlines of the deal with California
regulators, and the auto makers received formal civil subpoenas in
the fall.
Mary Nichols, chairwoman of the California Air Resources Board,
has said the state worked individually with the auto makers and
that all parties were mindful of not violating antitrust laws.
The New York Times first reported the Justice Department's
closing of the probe.
The Justice Department had started investigating the companies
amid larger conflicts between the Trump administration and
California, often on environmental grounds. In September, the
administration moved to take away California's ability to set its
own vehicle emissions standards, and then informed state leaders
that their air-pollution plans might be incomplete or unworkable,
putting billions of dollars in federal aid for the state at
risk.
The friction over the future of the auto industry has been the
biggest conflict. Since its earliest days, the Trump administration
has been attempting to roll back rules California had set in
collaboration with the Obama administration to reduce tailpipe
emissions. Leaders in the Republican administration want to curb
Democratic-dominated California's influence over rules governing
the industry.
The four companies announced a deal in July to support rules set
by the California Air Resources Board, betting it was the best way
to ensure one set of nationwide emissions standards. Justice
Department officials said at the time they believed the agreement
could effectively restrict competition by potentially limiting the
types of cars and trucks the auto companies offer to consumers,
according to people familiar with the department's thinking.
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. Several companies that hadn't announced interest
intervened on behalf of the Trump administration in October in a
lawsuit over its proposed rollback of new tailpipe-emissions
rules.
Write to Brent Kendall at brent.kendall@wsj.com and Timothy Puko
at tim.puko@wsj.com
(END) Dow Jones Newswires
February 07, 2020 17:51 ET (22:51 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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