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US Opens Antitrust Enquiry into California Automaker Settlement

The U.S. Justice Divison is probing whether the decision of four auto companies in July to reach a voluntary settlement with California to adopt state emissions standards breached antitrust law, people briefed on the matter stated Friday.

The antitrust department’s leader, Makan Delrahim, sent Aug. 28 letters to the four auto companies saying the government was concerned the settlement “may violate federal antitrust laws” but adding it had “reached no conclusions,” based on documents.

The disclosure comes as the Trump government has ramped up its opposition to auto companies seeking to sidestep it on rolling back Obama period fuel-effectivity rules. It further presages the beginning of a prolonged legal war that will decide the future of U.S. vehicle emissions and California’s role in setting automobile rules.

In July, Ford Motor, BMW, Volkswagen, and Honda Motor mentioned they had reached a settlement to adopt standards that had been lower than Obama period rules; however, higher than the Trump administration’s 2018 bid.

The auto companies were defying the Trump government’s effort to strip California of the right to fight the climate crisis by setting new standards. Manufacturers fear years of legal battles and want to ensure certainty over the standards they will face nationwide and think the agreement will profit them financially because it aims to avoid a patchwork of state requirements.

The Justice Department refused to comment on Friday. Delrahim’s letters asked the four auto companies to meet with the division “and give us more information regarding the formation” of the California settlement and automakers’ communications with each other.

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