Emissions excessive, but not the $125m penalty

The Full Federal Court has dismissed an appeal by Volkswagen AG against a $125 million penalty imposed by the Federal Court for making false representations about compliance with Australian diesel emissions standards.

In dismissing the appeal late last week, the Full Court held that the $125 million penalty “was not excessive, let alone manifestly excessive”. The penalty was originally imposed in December 2019, and Volkswagen appealed this decision, seeking orders that the court instead impose the $75 million penalty amount which had been jointly put to the court by Volkswagen and the Australian Competition and Consumer Commission (ACCC).

“$125 million is the highest penalty ever handed down for breaches of the Australian Consumer Law,” ACCC Chair Rod Sims said. “It’s about five times the previous highest penalty, and that reflects just how egregious Volkswagen’s conduct was.”

Volkswagen admitted to making false representations when seeking to import more than 57,000 diesel vehicles between 2011 and 2015. When listing those vehicles on the Australian Government’s Green Vehicle Guide website, Volkswagen did not disclose that the vehicles were fitted with two-mode software, which caused them to operate in one mode for the purposes of emissions testing and another when being driven. If tested in that second mode, the vehicles would have breached Australian emissions standards.

Read the Full Court’s decision.

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