Justice Department Drops Antitrust Probe of Auto Makers Involved in California Emissions Deal -- 2nd Update
February 07 2020 - 7:24PM
Dow Jones News
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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