The EU antitrust regulator said that after an in-depth investigation, it found the companies broke EU laws from 2006 to 2014 by illegally agreeing among themselves to limit the rollout of the technology, which helps clean the exhaust emissions from both gasoline and diesel passenger cars.
"Daimler, VW and BMW may have broken EU competition rules. As a result, European consumers may have been denied the opportunity to buy cars with the best available technology," European Competition Commissioner Margrethe Vestager said in a statement.
The EU focus is on selective catalytic reduction systems to reduce harmful nitrogen oxides emissions of diesel passenger cars through the injection of urea, which is also called AdBlue, in the exhaust gas stream.
It is also concerned about potential collusion on "Otto" particle filters to reduce harmful particle emissions from exhaust gases of petrol passenger cars.
Daimler, which alerted the collusion to the regulator, reiterated it did not expect to be fined as a result of its information. BMW and Volkswagen could not immediately be reached for comment.
EU fines could go as high as 10 percent of a company's global net sales.
The alleged actions would have limited Europeans' options for less-polluting cars, but not their price. The probe is separate from other legal procedures against carmakers for allegedly breaching environmental laws.
Emissions have become a big topic for carmakers as authorities try to meet climate-change goals and after Volkswagen admitted in 2015 that it cheated on car emissions tests.
EU authorities conducted dawn raids on the offices of the three companies in October 2017 and opened their investigation in September last year. At the time, Daimler, Volkswagen and BMW all said they were cooperating with the EU Commission.
The EU noted that its preliminary findings do not prejudge the final outcome of the investigation.
Material from Reuters was used in this report.