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VW fined record $125 million in Australia, considering appeal

VW was handed a record $125 million fine over its emissions scandal today but it is already considering an appeal.

AUSTRALIA’S FEDERAL COURT has significantly increased the original fine handed to Volkswagen by the Australian Competition and Consumer Commission to $125 million today.

It is the highest total penalty order ever recorded against a company for contraventions of the Australian Consumer Law.

Volkswagen admitted that it sought approval to import more than 57,000 vehicles from 2011-15 without disclosing the now commonly known ‘emissions-defeat device’ which has cost the company billions in fines and payouts around the world. Locally, the ACCC took VW to court to fine the company for misconduct.

During the original hearing in October this year, media attending said Federal Court judge Justice Foster questioned if the $75 million penalty was enough, despite the ACCC saying it was happy and VW suggesting it was fair. However, today, the Federal Court increased the fine by $50 million.

“Volkswagen’s conduct was blatant and deliberate,” said ACCC Chair Rod Sims in a media statement.

“This penalty reflects a trend of ever higher penalties for breaches of Australian consumer law.”

But a statement from VW says it is considering an appeal.

“Volkswagen AG (VWAG) firmly believes that the penalty of $75 million agreed in principle with the Australian Competition and Consumer Commission to resolve the regulatory proceedings was a fair amount and is carefully reviewing the Court’s reasons for deviating from that amount. VWAG will determine in coming weeks whether it will appeal the decision of the Court,” it said.

Sims added that the appeal was just:

“The previous highest penalties of $10 million for Coles, Ford and Telstra were recently overtaken by penalties of $12 million against We Buy Houses and then penalties of $26 million ordered against vocational training provider Empower Institute,” he said.

“Today’s $125 million in penalties were imposed under the old penalty regime of up to $1.1 million per breach. Under laws that came into effect later last year, maximum penalties are now the higher of $10 million, three times the profit or benefit obtained or, if this cannot be determined, 10 per cent of turnover.

“Essentially, Volkswagen’s software made its diesel cars, utes and vans operate in two modes. One that was designed to test well and another that operated when the vehicle was actually being used and which produced higher emissions. This was concealed from Australian regulators and the tens of thousands of Australian consumers driving these vehicles.”

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Alex Rae

Alex Rae