CANBERRA – Volkswagen Australia could be facing fines running into millions of dollars – perhaps even billions – if it is found to have used “defeat device” software to ensure its diesel-engined cars pass stringent pollution tests.In the USA, Volkswagen has halted all sales of its diesel models, following an investigation that found the emissions-cheating software had enabled thousands of cars to cheat the tests.

In Canberra yesterday, Australian Competition and Consumer Commission chairman Rod Sims confirmed the commission is conducting an “enforcement investigation” as a priority.

“We are very concerned about the potential consumer and competition detriment from this alleged conduct,” Sims said.

“First, using defeat devices is specifically prohibited under the Australian Design Rules, which are picked up as Australian Consumer Law (ACL) mandatory safety standards.”

“As the enforcer of the ACL, the ACCC can take action against any corporation that has breached mandatory standards.

“Secondly, cars are a big purchasing decision and claims that relate to environmental benefits or fuel efficiency can influence consumer choice.”

“Businesses must be able to substantiate any claims they make. The ACCC will be seeking marketing materials from VW Group and will not hesitate to take action if consumers were exposed to false, misleading or deceptive representations.”

He noted that the maximum penalty for a corporation caught breaching the ACL is A$1.1 million for each and every breach.

Sims also noted VW Australia is yet to clarify if it has supplied cars or car components into the Australian market that use defeat devices. And he said ACCC is also considering public comments made by Audi Australia on how their Australian customers are affected.

VW Australia has said it has asked its German head office if the offending software is in models sold in Australia (CDN, Sept. 23), but as of yesterday had not heard back.

 In Germany, Volkswagen has said it will refit up to 11.2 million affected vehicles in multiple countries at a cost of US$7.3 billion. The company is now subject to legal proceedings, regulatory investigations, and class action lawsuits in a number of countries.