ACCC takes Audi to the Federal Court for Misleading 'Defeat' Software

Friday 24 March 2017 @ 11.46 a.m. | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) have launched a suit in the Federal Court against German car company Audi, its Australian subsidiary, Audi Australia, and its parent company, Volkswagon. The ACCC alleges that the companies engaged in misleading and deceptive conduct between 2011 and 2015 when it claimed that its cars were environmentally friendly but later complaints revealed that it had fitted its cars with software to cheat emission tests.

ACCC Allegations

The ACCC claims that Audi had installed ‘defeat’ software in certain Audi branded vehicles. The effect of the software caused Audi vehicles to produce lower nitrogen oxide (NOx) during lab conducted tests than normal on-road driving conditions. Further to this, the ACCC alleges that Audi had engaged in misleading and deceptive conduct by representing to its customers that its vehicles complied with Australian regulatory requirement for road vehicles. Audi had, through various advertising outlets, marketed its vehicles as environmentally friendly and complied with stringent European standards. Lastly, the ACCC alleges parent company Volkswagen designed and supplied the engines and defeat software to Audi for installation in the affected vehicles.

ACCC Chairman Rod Sims said:

“Consumers expect that there is 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.”

Audi Response

Audi Australia criticised the ACCC’s action for not providing any practical benefits to consumers as the company had already taken technical measures to voluntarily issue recalls on most affected vehicles:

"The company believes that the best outcome for those valued customers with an affected vehicle is to have the voluntary recall service updates installed."

It is noted that United States Audi had pleaded guilty in January 2017 to conspiracy, obstruction of justice, and importing of vehicles under false statements. 

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