Australia’s Federal Court has ordered German auto giant, Volkswagen AG, to pay 125 million Australian dollars ($86 million) in penalties for breaching diesel emissions standards and flouting consumer law.
The amount is the highest total penalty order ever handed down by an Australian court for contraventions of Australian Consumer Law, the Australian Competition and Consumer Commission (ACCC) said.
Volkswagen AG had admitted that when it sought approval to supply and import more than 57,000 vehicles into Australia between 2011 and 2015, it did not disclose to the government the existence of “Two Mode” software.
The company did not disclose to the government the existence of “Two Mode” software, which allowed them to make false representations about compliance with diesel emissions standards.
One of the modes was designed to test well while the other, which produced higher emissions, was used to operate the vehicles on the road.
The software was designed in 2006 but was not discovered until 2015.
“Volkswagen’s conduct was blatant and deliberate,’’ ACCC Chair, Rod Sims, said.
“This penalty reflects a trend of ever-higher penalties for breaches of Australian consumer law.’’
Before this fine, the highest penalty for flouting the consumer law had been 26 million dollars ordered against vocational training provider, Empower Institute, in September.
Regulatory authority ACCC initiated legal proceedings against Volkswagen AG in September 2016 and against Volkswagen-owned Audi in March 2017.
The legal proceedings against Audi were dismissed as part of Friday’s resolution.
Meanwhile, Volkswagen AG said it will decide whether to appeal against the decision, stating an initial 75-million-dollar penalty agreed with the ACCC was “fair”.
The carmaker has already settled a separate Australian class action in September for $96 million.