The government has imposed sanctions on German passenger car manufacturers for collusion in emission reduction technology.

The Fair Trade Commission (Chairman Han Ki-jung) has provisionally decided to impose a total of 42.3 billion won in fines and corrective orders on German diesel passenger car manufacturers Mercedes-Benz Group AG, BMW AG, Audi AG, and Volkswagen AG for agreeing to introduce software to reduce the amount of urea solution injected while developing exhaust gas reduction technology (SCR).

The EU strengthened its NOx regulations by more than double the previous level (Euro 5: 0.18 g/km) through Euro 6b, which came into effect in September 2014, and Korea also strengthened its NOx regulations by more than double the previous level (0.18 g/km) through the NOx emission standards that came into effect in January 2014.

The four companies concluded that the exhaust gas recirculation (EGR) and NOx capture devices (LNT or NSC) used in the industry at the time could not meet the strengthened regulations, and that NOx post-treatment devices such as SCR were required to meet the regulations.

In the process, the four companies formed a consensus on reducing the consumption of urea water.

The four companies manufactured and sold diesel passenger vehicles equipped with SCR software (conversion to feed-forward mode and conversion bits 1 to 7 are installed as basic functions) that reflected the agreement, and as a result, they independently discovered the possibility of researching and developing a urea injection strategy that can maximize the NOx reduction effect. Blocked.

The four companies' actions constitute an anti-competitive agreement that prevents the development and launch of diesel passenger cars that could exhibit superior NOx reduction performance.

The feed-forward mode conversion Bits 2 to 6 agreed upon by the four companies were aimed at reducing urea water consumption (injection amount), but resulted in sacrificing NOx reduction performance while not confirming effects such as NH3 Slip prevention. Through this, the four companies jointly avoided competing to develop eco-friendly innovative technologies that could overcome the disadvantages while maintaining the advantages of the single injection strategy (minimizing NOx emissions), and as a result, domestic consumers' opportunities to choose eco-friendly vehicles with excellent NOx reduction performance were limited.

In addition, the basic functions of the SCR software (such as switching to feed-forward mode) that were created as a result of the agreement on this case can be seen as the trigger for the illegal manipulation of diesel passenger car exhaust emissions by three companies, excluding BMW (aka 'Dieselgate').

Accordingly, the Fair Trade Commission decided to impose a total of KRW 42.3 billion (provisional) in fines along with corrective orders (orders to prohibit acts) on four companies pursuant to Article 19, Paragraph 1, Item 6 of the old Monopoly Regulation and Fair Trade Act (acts that restrict the types or specifications of goods or services during production or transaction of such goods or services).

Going forward, the Fair Trade Commission plans to strengthen its monitoring of international cartels that harm domestic consumers and businesses and take strict measures with a zero-tolerance policy when discovered.