Corporate collusions, crisis communications and regulations

by | Jul 28, 2021 | Public Relations

Recently, the car corporations Audi, Volkswagen, BMW, Porsche, and Mercedes-Benz, along with the parent company Daimler, were fined $1 billion by the European Union because they had spent years colluding on ways to slow down the deployment of technology that would allow for cleaner emissions.

The executive branch of the European Union hit the group of companies with a collective $1 billion fine because of each company’s role in the collusion. The only exception was Daimler, which managed to evade the fine because that’s the automaker that revealed the scheme in the first place to the EU regulators.

This situation is separate from the Dieselgate situation that Volkswagen Group has been involved in, where the company was installing misleading software on its diesel vehicles. That software helped mislead many environmental regulators into thinking that the vehicles were compliant with emissions regulations when they were actually polluting a lot more than the legal limits. In that situation, the Volkswagen Group had to pay almost $40 billion in legal fees, fines, and buybacks. Additionally, Daimler had also used similar software on some of its own vehicles, and also had to pay billions of dollars in fines.

One of the companies that wasn’t involved in the Dieselgate situation was BMW, which hadn’t been cheating on its emissions tests with environmental regulators. It was actually back in 2017 that the existence of this collusion was first revealed in a report which stated that those falsified diesel emissions actually dated back to the 1990s.

When the report first surfaced, the authorities of the European Union announced an investigation into those allegations, and started looking for evidence supporting them. The report also stated that the companies had been meeting in secret to discuss the technology, suppliers, costs, and details for the diesel vehicles.

Then, in 2019, the European Union finally accused the companies of colluding, and revealed some of the details behind the scheme. According to the EU, Daimler revealed the collusion towards the end of 2017, and described details such as the sizes of the vehicle’s tanks and the solution that was mixed with the gas to minimize the pollutants during the tests.

One of the corporations, the Volkswagen Group, also released a statement on the situation, saying that no customers ended up getting harmed in the entire situation. Although big collusions like the aforementioned one aren’t very common, when things like this end up happening, it’s best to work together with regulators before making any sort of public statements. This way companies can avoid making potentially misleading statements to the public as well—because then, things with the regulators can be first clarified. It’s classic good crisis PR to manage ahead of bad situations.

Additionally, working with regulators first and clearing up any mistakes with them can also mean that the company might not damage its own reputation and public trust any further in negative situations.

In this case, with the collusion, the authorities with the European Union stated that it doesn’t tolerate companies colluding and will be cracking down on such situations even further in the future.

Ronn Torossian
Ronn Torossian founded 5WPR, a leading PR agency..


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