Australia Latest Legal Venue in Dieselgate Scandal

Luxury brand Audi appears before Australia’s Federal Court to answer charges of misleading or deceptive conduct over its diesel-vehicle emissions claims.

The Australian Competition and Consumer Commission instituted the proceedings against Audi, its Australian subsidiary Audi Australia and their owner Volkswagen.

The commission alleges the companies made false or misleading representations in relation to diesel-emissions claims, and VW was knowingly involved in this conduct.

It alleges that between 2011 and 2015 Audi engaged in misleading conduct by not disclosing the existence and operation of defeat software in Audi-branded vehicles. The software caused the vehicles to produce lower nitrogen oxide emissions under test conditions in a laboratory than during normal on-road driving conditions.

About 12,000 vehicles sold by Audi Australia are affected by the proceedings.

Commission Chairman Rod Sims says consumers expect some relationship between the performance of the car as set out in the sales brochure and their day-to-day on-road use.

“We allege that the installation of software which allows the vehicle to meet testing standards, but then causes the vehicles to operate differently on the road, and associated representations about the vehicle and its performance, breach the Australian Consumer Law,” Sims says in a statement.

The ACCC is seeking fines, corrective advertising and other penalties.

The so-called Dieselgate scandal also involves VW’s Skoda-brand vehicles, but the consumer agency says it will not take further action against VW – which owns the Skoda brand in Australia – over the Skoda vehicles.

It cites Skoda’s lower Australian sales volume, class actions seeking damages for affected consumers and the proceedings the commission began in September against VW over VW-branded vehicles and now, Audi.

Audi Australia tells Fairfax Media the consumer commission’s action provides no practical benefits to consumers.

“The company believes that the best outcome for those valued customers with an affected vehicle is to have the voluntary recall service updates installed,” a spokesman is quoted as saying. “Audi Australia is reviewing the claims made by the ACCC (and) defending class-action suits brought by private plaintiffs.”

Australian Automobile Assn. CEO Michael Bradley is pleased the government is taking legal action against Audi, saying Australian consumers are entitled to assume there is a relationship between the performance of the car as set out in the sales brochure and their day to day on-road use.

“This is why the AAA is investing A$500,000 ($377,419) in a pilot program to test the fuel consumption and emissions of 30 vehicles in on-road Australian conditions, and to compare the results with the mandatory laboratory limits and on government-mandated fuel-consumption labels,” he says.

AAA says results from the first 10 vehicles it tested under the program showed emissions of noxious gasses up to four times the regulatory limits, while greenhouse-gas emissions and fuel consumption were on average 20% higher than figures shown on the mandated fuel-consumption label.

Bradley says VW’s actions raise questions about Australia’s emissions-compliance practices and notes no independent vehicle-compliance testing is performed in Australia to protect consumers or the environment.

 “It’s fitting the legality of the actions of these companies be tested against Australian law,” he says.