Car makers under investigation for "anti-competitive behaviour"

The Competition and Markets Authority (CMA) has opened an investigation into the recycling of written-off or aged vehicles. 

The UK-government-driven regulatory body said it has reason to believe that several vehicle manufacturers and some industry bodies are involved in “anti-competitive behaviour”.

“This conduct relates to arrangements for recycling old or written-off vehicles, specifically cars and vans, which are known in the industry as ‘end-of-life vehicles’ or ELVs,” the CMA said in a statement.

ELVs are characterised as such because of age-related failures or serious accidents and investigations into their disposal are not uncommon.

In 2018, the CMA ordered that European Metal Recycling – the largest recycler of scrap metal in the UK – sell five scrap sites that it had purchased from Metal Waste Recycling, because the deal could have led “to a worse deal for customers and suppliers". 

The CMA also ruled the deal could have “harmed the choices available to suppliers (such as car breakers) that supply shredder feed (scrap metal that needs to be shredded) in the south-east of England". 

It also found that the merger could have led to a worse deal for UK customers who buy new-production steel and harmed vehicle manufacturers selling large volumes of scrap metal through tendered contracts. 

According to the CMA, regulations mean ELVs should be disposed of sustainability and car makers are required to provide customers with a free service to have them recycled. This service is often outsourced to third parties. 

Regulations also dictate that the use of hazardous substances such as lead, mercury, cadmium and hexavalent chromium can't be used when manufacturing new vehicles “except in defined exemptions when there are no adequate alternatives”.

“The CMA is working closely with the European Commission, which has also launched an investigation into this today,” the CMA said. 

"Following a period of investigation and information gathering, the CMA may issue a statement of objections if it comes to the provisional view that competition law has been infringed.

"At this stage, no assumptions should be made about whether competition law has been broken.”

The CMA said it won't name which parties are under investigation until it's further into the process.