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New twist in the Volkswagen investigation

Tom Fox | July 24, 2017

Volkswagen continues to find itself in the news these days. In one of the more interesting recent twists, VW has accused a group of fellow German car manufacturers of collusion over the diesel engine scandal, now almost two years old.

Following reports that the European Commission was investigating cartel allegations among a group of German carmakers, the BMW Group issued a statement denying the allegations. “Due to current media reports, the BMW Group considers it has become necessary to make its position regarding recent allegations clear,” the company said.

“As a matter of principle: BMW Group vehicles are not manipulated and comply with respective legal requirements. Of course this also applies to diesel vehicles. Confirmation of this is provided by the results of relevant official investigations at the national and international level.”

At this point, it is not clear how widespread the damage VW’s ploy will be to the entire German auto industry. VW could simply be trying to get out in front of allegations regulators would stumble upon later. However, it could also be trying to damage its rivals as well.

There are many different forms of compliance. For the anti-trust compliance practitioner, usually little thought is given to anti-trust compliance. Even in the United States, one FCPA case involved anti-trust allegations. Back in 2011, Bridgestone pled guilty and paid a $28 million criminal fine for its role in conspiracies to rig bids and bribe foreign officials.

For The Man From FCPA, the best response for these companies is to echo the response given by Ulrich Grillo, then president of German global industry association, BDI, who was quoted in the Financial Times stressing the importance of compliance. German companies must check their “management processes, including compliance and control systems,” Grillo told the Financial Times. “We must now ask: are we doing everything right?”

When the president of a national industrial association says compliance is the answer, The Man From FCPA suggests you need to sit up and take notice.