Nobody knows what happened within the MMC Association in 1998.
In 1999, some members from the MMC Association decided to split and create SD Association. But nobody seems to exactly know why.
MMC's origins are non-trivial to source. At the time of writing, the Wikipedia article on the MultiMediaCard cites a Tom's Hardware blogpost, which briefly mentions that MMC was "codeveloped by SanDisk and Infineon Technologies AG (formerly Siemens AG) in November 1997". Other citations in said article are equally as poor: the sources also include a makeuseof article, and the citation is about... low-level hardware quirks. Hence, I'm not taking anything written there at face value.
Digging for actual sources lead me to the MMC Association's news page (archived, 1998), which itself linked to a press release by SanDisk. The interesting parts are:
The exact course of events during development is likely lost to time, but we can at least be sure that Siemens started it, while SanDisk and the rest joined later. This release also documents some interesting historical oddities:
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