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Home / Business / The Justice Department opens antitrust request for car manufacturers' emissions pact with California

The Justice Department opens antitrust request for car manufacturers' emissions pact with California



The Department of Justice has opened an antitrust investigation of the four major car manufacturers that signed a deal with California this year to reduce car emissions, according to people familiar with the case, and escalates a standoff between President Trump, California and the auto industry over one of his key returns of climate regulations.

The Trump administration is in the process of drastically rolling back the Obama era rules designed to reduce car emissions that contribute to global warming, an effort large car manufacturers have publicly opposed. The administration is also considering a plan to revoke California's legal authority to enforce stricter greenhouse gas emissions regulations within its state boundaries, and put the two sides on collision course.

In July, four automakers – Ford Motor Company, Volkswagen of America, Honda and BMW – announced that they had reached an agreement with California to adhere to standards that are a little less stringent than the Obama-era rules, but it will yet require car manufacturers to significantly improve the fuel economy of vehicles. The announcement came as an embarrassment to the Trump administration, which attacked the move as a “P.R. stunt. "

Now, the Department of Justice is investigating whether the four car manufacturers violated federal antitrust laws by coming to a side deal to follow California's stricter rules, these people said. The Ministry of Justice declined to comment on the investigation, which was originally reported by The Wall Street Journal.

"It is extremely unusual for an prosecutor to investigate a deal that has not even been signed," Revesz said.

"These are four car companies that stands in the way of what the president wants to do, " Mr. Revesz said. "Now the huge prosecution of the federal government has been carried against them. This should make big companies very nervous."

The investigation already appears to have that effect. Another company, Mercedes-Benz, had become aware to join the California agreement, but after the German government learned of the federal investigation into the other companies that had signed, it warned Mercedes not to participate, according to a person familiar with the matter who spoke anonymously about it due to the sensitivity of the negotiations.


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