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The Australian Competition and Consumer Commission has brought legal proceedings against car manufacturer Volkswagen over allegations that it concealed software in its vehicles to cheat emissions testing and mislead consumers.
Proceedings were brought against German company Volkswagen Aktiengesellschaft (VWAG) and its Australian subsidiary, Volkswagen Group Australia Pty Ltd (VGA) (together, Volkswagen) in the federal court on Wednesday, over the emissions scandal which has rocked the car manufacturer around the world.
"I think this is a 10-out-of-10 matter, in terms of the seriousness of the allegations we are making," said ACCC Chairman Rod Sims.
The ACCC is alleging that between 2011 and 2015 Volkswagen engaged in misleading conduct by installing and not disclosing the existence and operation of "defeat" software, which controlled the operation of the vehicles' exhaust gas recirculation system.
The software is installed in around 11 million vehicles worldwide, Volkswagen revealed last year.
The purpose of the software is to cause vehicles to produce lower nitrogen oxide (NOx) emissions when subject to test conditions in a laboratory, and to alternate to a different mode with significantly higher NOx emissions output under normal on-road driving conditions.
The ACCC alleges Volkswagen's misleading conduct extended to the representation that the vehicles complied with Australian and European regulatory standards and that their vehicles were environmentally friendly and low emission.
More than 57,000 vehicles sold in Australia by Volkswagen over a five-year period are affected.
"...The allegation is all about [Volkswagen] defeating regulations that governments have decided they want vehicles to comply with...so putting in that device to avoid those regulations, I think it is fair to say it is about as serious as it gets," Mr Sims said.
Volkswagen described the court action as unnecessary and noted the action would not help consumers.
The company is waiting on the federal government to approve a software solution for 70 per cent of affected cars and expected a fix to be available for all cars by the end of the year, the company's Australian managing director Michael Bartsch said.
"The best outcome for customers whose vehicle is affected is to have the voluntary recall service updates installed," Mr Bartsch said.
"This takes 45 minutes. It is free of charge. We will be contacting owners of affected vehicles to arrange an appointment with their dealer."
Volkswagen was reviewing the ACCC's claims, he said.
Mr Sims said the ACCC had found discussions with Volkswagen regarding the proceedings to be "difficult".
"I guess the Volkswagen chief executive has been quoted as saying they don't believe they have breached Australian law, so that that has been the starting point," he said.
"It has not been easy, it's been difficult to get information and the cooperation we would have hoped for."
The ACCC is seeking declarations, pecuniary penalties, corrective advertising, findings on fact and costs.
In February 2016, Volkswagen Group Australia announced a consumer recall, with rectification for affected Amarok vehicles.
The manufacturer is currently seeking approval from the Department of Infrastructure and Regional Development for rectification of other affected vehicles across all brands.
The car maker is also facing a class action led by Maurice Blackburn to recover losses for customer who bought cars fitted with the emissions-rigging software.
Governments across the world have moved against Volkswagen since the so-called "emissionsgate" scandal erupted in September 2015 following vehicle tests in the US that showed "real-world" emissions were far higher than lab results and breach legal pollution limits.
The Volkswagen vehicles covered by the court proceedings:
- Amarok 2.0 litre – 2011 to 2012
- Caddy 1.6 and 2.0 litre – 2010 to 2015
- Eos 2.0 litre – 2009 to 2014
- Golf 1.6 and 2.0 litre – 2009 to 2013
- Jetta 1.6 and 2.0 litre – 2009 to 2015
- Passat 2.0 litre – 2008 to 2015
- Passat CC 2.0 litre – 2008 to 2012
- Polo 1.6 litre – 2009 to 2014
- Tiguan 2.0 litre – 2008 to 2015
- CC 2.0 litre – 2011 to 2015
