Yahoo Finance Volkswagen's $75m fine over diesel emissions scandal rejected by judge
A $75m fine negotiated between Volkswagen and the consumer watchdog over the diesel emissions scandal could be increased by the federal court, after a judge reportedly rejected the deal as “outrageous.”
The Australian Competition and Consumer Commission (ACCC) and the German car company presented the negotiated penalty along with a statement of agreed facts to the federal court in Sydney on Wednesday.
It comes one month after Volkswagen settled a class action for between $87m and $127m with owners of some of the 100,000 cars that were affected by the emissions test cheating and subsequent global recall in Australia.
Related: Volkswagen emissions scandal: mass lawsuit opens in Germany
Volkswagen has been fined more than €30bn ($49bn) worldwide since the scandal first came to light in 2015. This month, a class action with 470,000 owners of Volkswagen, Skoda, Audi and Seat began in Germany.
The ACCC has been pursuing Volkswagen Aktiengesellschaft (VWAG) and its Australian subsidiary Volkswagen Group Australia through the courts since 2016 over “false or misleading conduct” involving the use of software which prompted diesel vehicles to produce lower-emissions fuels under test conditions.
About 11 million cars worldwide were sold as producing significantly lower emissions than they did under normal driving conditions.
Related proceedings against Audi AG and Audi Australia, subsidiaries of VWAG, were filed by the ACCC in 2017.
Volkswagen made no admissions in the agreed facts with regard to environmental or health impacts caused by higher emissions, and no admissions regarding the knowledge of its board.
It accepted the $75m penalty, which is three times higher than the record $26.5m penalty in an ACCC case levied against training college Empower Institute last month.
Related: Volkswagen settles Australian diesel class actions that affected 100,000 vehicles
But federal court justice Lindsay Foster rejected the statement, saying, according to a report in the Australian Financial Review: “I don’t accept the submission, it’s outrageous.”
Foster questioned the imputation that the top layers of the corporation would not have known about the emissions software.
The ACCC declined to comment on the hearing beyond confirming it had submitted a statement of agreed facts and proposed orders to the federal court.
“The proposed orders include a penalty of $75m but it is ultimately for the court to decide the appropriateness of the penalty,” a spokeswoman said.
The decision has been reserved.
