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Sep 03, 2023

(LEAD) Regulator issues correction order on 4 German carmakers for emission system collusion

URL is copied. (ATTN: UPDATES with additional info in last 3 paras)By Kang

URL is copied.

(ATTN: UPDATES with additional info in last 3 paras)By Kang Yoon-seung

SEOUL, Feb. 9 (Yonhap) -- South Korea's antitrust regulator said Thursday it has decided to issue a correction order on four German carmakers operating here for colluding to adopt a system that results in higher nitrogen oxide (NOx) emissions and fine them a total of 42.3 billion won (US$33.5 million).

The move came after the German brands -- BMW, Mercedes-Benz, Audi and Volkswagen -- adopted software to make their diesel cars consume less urea solution during the process of developing selective catalytic reduction (SCR) technology, according to the Fair Trade Commission (FTC).

Diesel cars come with an SCR device to reduce the emission of NOx exhausted from diesel engines under environmental regulations. NOx is a type of toxic gas that may cause respiratory and lung diseases, the regulator said.

The FTC said the four companies have decided to have their cars operate for a certain distance without additional urea solution, despite concerns it may lead to an excessive emission of NOx.

"The action made by the four companies is a collusion that limits competition and has hindered the development of new diesel cars that can come with more advanced NOx reduction technologies," the FTC said.

"As a result, local consumers' opportunities to select eco-friendly cars with advanced NOx reduction technologies were limited," it added.

The watchdog said it plans to bolster its monitoring of the "international cartel" that affects local consumers and businesses.

The FTC plans to slap fines of 20.7 billion won on Mercedes-Benz Group, followed by 15.6 billion won on BMW and 5.9 billion won on Audi. Volkswagen was not fined as affected models were not sold in South Korea.

Mercedes-Benz Korea Co. said it does not agree with the FTC's claim that the case has led to the alleged manipulation of emission data, noting it is dealing with the issue through a separate lawsuit.

The company said the same case was earlier referred to at the European Commission, but the EU executive body did not impose a fine on the Mercedes-Benz Group as the German carmaker made a voluntary report.

Other carmakers were not immediately available for comment.

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