Volkswagen Aktiengesellschaft v ACCC  FCAFC 49: Appeal Against Penalties Dismissed
In Volkswagen Aktiengesellschaft v ACCC  FCAFC 49 (9 April 2021), the Full Federal Court has dismissed an appeal by Volkswagen Aktiengesellschaft ("Volkswagen") against the penalties handed down for making false representations in regards to its compliance with Australian diesel emissions standards.
The Australian Competition and Consumer Commission (“ACCC”)commented that the Full Federal Court “upheld the $125 million penalty imposed ... and held that the $125 million penalty ‘was not excessive, let alone manifestly excessive’.”
In December 2019, Federal Court imposed penalties of $125 million following its decision in ACCC v Volkswagen Aktiengesellschaft  FCA 2166 (20 December 2019). Volkswagen sought to appeal this decision on seven grounds. Part of Volkswagen's appeal included an appeal against the fine, stating that the fine was “manifestly excessive” as the company had already been penalised in other jurisdictions, including a US$2.8 billion fine in America. Volkswagen sought orders that the Court impose a $75 million penalty amount instead, which had been jointly put to the Court by Volkswagen and the ACCC.
The penalties were imposed under the previous Australian Consumer Law (“ACL”) penalty regime within the Competition and Consumer Act 2010 (Cth), which specified a maximum penalty of $1.1 million per contravention.
Since then, legislative amendments have come into effect, and the maximum penalty for certain contraventions under ACL is now the higher of:
- $10 million; or
- Three times the profit or benefit obtained; or
- If the profit or benefit cannot be determined, 10% of the company’s annual Australian sales turnover.
In its media release, the ACCC said that between 2011 and 2015, Volkswagen admitted to making false representations when seeking to import more than 57,000 diesel vehicles into Australia and when listing those vehicles on the Australian Government’swebsite. Volkswagen did not disclose that the vehicles were fitted with two-mode software. The cars would operate in one mode for the purposes of emissions testing and in the other when being driven. If tested in the second mode, the vehicles would have failed Australian emissions standards.
Comments and Reaction
ACCC Chair Rod Sims said in the Media Release:
Mr Sims further said:
In their judgement, Wigney, Beach and O’Brien JJ said at [paras 212-213]:
Response from Volkswagen
A spokesperson for Volkswagen commented in an Australian Financial Review article that:
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Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission  FCAFC 49 (9 April 2021)