Volkswagen Loses Appeal Against $125m Fine for Misleading Customers

The High Court of Australia ruled on Friday that Volkswagen AG must pay a record fine of AU$125 million ($91 million) for misleading its customers regarding the diesel emissions of its vehicles in Australia.

The Australian Competition & Consumer Commission (ACCC) filed a case against Volkswagen in 2016 for violating consumer laws after misrepresenting the compliance of their product cars with Australian diesel emission standards.

The Federal Court ruled in 2019 to fine Volkswagen AU$125 million, which the company appealed to be reduced to AU$75 million ($55 million). 

The reduced penalty was agreed upon by the ACCC, but the Federal Court dismissed it in April 2021. On Friday, another appeal to the High Court filed in May 2021 was similarly dismissed.

“This penalty reflects the seriousness of Volkswagen’s conduct and is a massive reminder for all businesses to take their obligations under the Australian Consumer Law seriously, and not mislead in pursuit of profit,” said ACCC Chair Rod Sims.

Sims added that Volkswagen “deprived consumers who may have deliberately sought to buy a low emissions vehicle, of the ability to make an informed decision.”

The competition watchdog noted that Volkswagen made false representations of 57,000 diesel vehicles imported into Australia between 2011 and 2015.

The car company did not disclose that the vehicles were equipped with a “two mode” software that can switch to a low emission setting when being tested and a standard-breaching setting when driven.

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