U.S. ends antitrust probe of four automakers over California emissions deal

WASHINGTON (Reuters) - The U.S. Justice Department on Friday told four automakers it had closed an antitrust investigation into a voluntary agreement the companies reached with California on emissions without taking any action, three automakers and a source told Reuters.

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Ford Motor Co, BMW AG and Honda Motor Co confirmed the probe had been ended. A source confirmed it had also been closed in connection with Volkswagen AG VOWG_p.DE as well. Volkswagen did not immediately comment.

The Trump administration in September issued a determination that California cannot set its own vehicle emission standards and had been investigating if the companies engaged in anti-competitive conduct in striking the deal. The Justice Department did not immediately comment.

California Governor Gavin Newsom said “these trumped up charges were always a sham – a blatant attempt by the Trump administration to prevent more automakers from joining California and agreeing to stronger emissions standards. This is a big loss for the president and his weaponization of federal agencies – and a victory for anyone who cares about the rule of law and clean air.”

The deal with the California Air Resources Board announced in July bypassed a White House effort to strip the state of the right to fight climate change by setting its own standards and drew anger from President Donald Trump.

After the probe became public, at least one automaker that had been seriously considering joining the voluntary agreement opted not to do so.

California and other states had vowed to enforce stricter Obama-era emissions standards after Trump proposed rolling back the federal rules in August 2018. Automakers had worried that court battles between state and federal governments could create years of uncertainty for manufacturers.

The plan is more stringent than Trump’s proposal but looser than the Obama-era rule.

The Environmental Protection Agency last year derided the agreement as “a PR stunt that does nothing to ... provide certainty and relief for American consumers.”

Democrats in Congress suggested the probe was politically motivated and demanded the Justice Department point to similar probes of voluntary agreements.

The White House still must finalize the rollback of the Obama-era standards. Last month, Reuters reported the White House is reviewing a draft final proposal that would boost the stringency of U.S. vehicle emission standards by 1.5% annually from the 2021 through 2026 model years, which will still be considerably lower than planned Obama-era standards that hiked yearly requirements by about 5% annually.

The Trump administration initially proposed freezing fuel economy standards at 2020 levels through 2026.

Reporting by David Shepardson; Editing by Cynthia Osterman and Daniel Wallis