Australia Sues Volkswagen Over Emissions Claims
September 01 2016 - 12:00AM
Dow Jones News
MELBOURNE, Australia—Australia's consumer watchdog is suing
Volkswagen AG for misleading consumers and allegedly concealing
software in tens of thousands of vehicles to cheat emissions
testing.
In a statement Thursday, the Australian Competition and Consumer
Commission said it had begun proceedings in the Federal Court of
Australia against the German car maker and its Australian
subsidiary. It accused the company of engaging in misleading or
deceptive conduct, making false or misleading representations and
engaging in conduct liable to mislead the public over its
diesel-vehicle emissions.
It raises pressure the on Volkswagen, which is already defending
a class-action suit in Sydney brought in November by law firms
Maurice Blackburn and Bannister Law.
Australia's emission regulations are almost identical to
European Union laws. If an Australian court determines that
Volkswagen's emissions system contained an illegal element known as
a defeat device, Australia could become a precedent for billions of
euros in claims in Europe.
In response to the latest case, Volkswagen Group Australia Pty.
Ltd. said it was reviewing the claims made by the regulator. It
said it didn't think the suit offered any practical benefit for
consumers, as the company will soon introduce software solutions
for cars affected by its voluntary recall.
"The best outcome for customers whose vehicle is affected is to
have the voluntary recall service updates installed," said Michael
Bartsch, managing director of Australian operations.
The regulator alleged that between 2011 and 2015, Volkswagen
installed and hid defeat software that caused diesel vehicles to
produce lower nitrogen oxide emissions under laboratory test
conditions, but switched to a different mode under normal driving
conditions. The company claimed its vehicles complied with
Australian and European standards and marketed the vehicles in
Australia as environmentally friendly and clean burning, when that
wasn't normally the case, the ACCC said in its claim.
The case covers more than 57,000 vehicles sold by Volkswagen in
Australia, including Golf, Jetta and Polo cars and Amarok pickup
trucks.
In July, Volkswagen's attorneys told the federal court that was
hearing the class action there was no defeat device to manipulate
emissions.
Volkswagen in February began a recall of vehicles, starting with
8,694 affected Amaroks, relating to specific diesel engines built
between 2008 and 2015 to resolve what it said was a software issue
that permitted deviations in nitrogen oxide emissions
performance.
In the U.S., Volkswagen admitted to using a defeat device. In
June, It agreed to pay up to US$14.7 billion to settle
emissions-cheating claims with U.S. consumers and regulators.
Volkswagen has said the situation in Australia and Europe
differs to that in the U.S., where regulations covering nitrogen
oxide emissions limits are much stricter and engine variants differ
significantly. Standards in Australia and Europe—where the company
said there is no compensation for customers—focus on lowering
carbon monoxide emissions and fuel consumption.
"Consumers rightly expect that their vehicle's emissions would
operate as advertised during their day-to-day use, and we allege
that this was not the case," said Rod Sims, chairman of the ACCC.
"These allegations involve extraordinary conduct of a serious and
deliberate nature by a global corporation and its Australian
subsidiary misleading consumers and the Australian public."
The regulator is seeking financial penalties, a public
declaration of misconduct and corrective advertising from the
company.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
August 31, 2016 23:45 ET (03:45 GMT)
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