Volkswagen $125m fine upheld by High Court

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A record $125 million penalty against German car manufacturer Volkswagen for breaching diesel emissions standards has been upheld by Australia's highest court.

The car marker lost its High Court bid for special leave to appeal the 2019 penalty for misrepresentations of vehicle exhaust emissions between 2011 and 2015.

Volkswagen wanted to overturn the Federal Court penalty and have it replaced with a $75 million fine originally agreed to with Australia's consumer watchdog.

But the Federal Court in 2019 rejected this, with Justice Lindsay Foster at the time describing Volkswagen's conduct as an "egregious breach of Australian consumer law of the worst kind imaginable".

It evaded emission standards in Australia by installing a "two mode software" causing different emissions to be released depending on how the vehicle was operated.

Volkswagen admitted failing to disclose the existence of the software when it sought approval for the importation of more than 57,000 vehicles into Australia.

It made hundreds of applications to be included in Australia's Green Vehicle Guide website to help consumers "choose a cleaner car" by comparing environmental standards of vehicles based primarily on emissions.

But its "defeat devices" were exposed by the US Environmental Protection Agency and Volkswagen acknowledged the "moral and political disaster" their "test manipulations" had created.

The Australian Competition and Consumer Commission welcomed the High Court's decision as sending a strong decision to large companies.

"What made it particularly egregious in this case is that if Volkswagen had told the truth, these vehicles would not have been legally allowed to be sold in Australia," chair Rod Sims said.

"Their conduct showed complete disregard for Australia's vehicle import regulations, which are designed to protect consumers."

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