The US Department of Justice (DOJ) has launched an antitrust investigation into BMW, Ford, Honda and Volkswagen, the four automakers that came to a voluntary agreement with California to follow stricter fuel efficiency standards. After The Wall Street Journal broke the news, Ford and Honda confirmed they plan to cooperate with the investigation.
When the agreement was first announced in July, it was seen as a direct challenge to the Trump administration’s planned rollback of the Obama-era Clean Power Plan, which would have held automakers to improve fuel economy to 54.5 miles per gallon by 2025. The paper’s sources claim the White House did not order the DOJ to launch the investigation. Instead, the agency reportedly began looking into the four companies out of a worry they had conspired with one another to create the agreement. The DOJ may see the pact as an agreement between the four companies not to compete with one another on the grounds of fuel efficiency. Notably, the DOJ isn’t investigating Mercedes-Benz, one of two companies that had been reportedly leaning toward joining the pact.
In a separate letter, the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) told California to essentially leave the agreement. “We urge you to act immediately to disassociate CARB [California Air Resources Board] from the commitments made by the four automakers,” says the note. “Those commitments may result in legal consequences given the limits placed in federal law on California’s authority.”
In response, CARB Chairwoman Mary Nichols said, “The U.S. Department of Justice brings its weight to bear against auto companies in an attempt to frighten them out of voluntarily making cleaner, more efficient cars and trucks than [the] EPA wants. Consumers might ask, who is [EPA chief] Andy Wheeler protecting?” The investigation is likely to further fray an already tense relationship between the Trump administration and California, though whether it will actually lead to any antitrust convictions is hard to say. The DOJ is likely to have a hard time arguing that BMW, Ford, Honda and Volkswagen broke antitrust rules by coming together with a state regulator to negotiate public policy.