Volkswagen's appeal over its record $125 million fine for deceiving consumers about diesel emissions has been dismissed.
The highest ever penalty for breaches of Australian consumer law was handed down in the Federal Court in 2019 after Volkswagen was exposed in other countries of a similar deception.
The global car manufacturer's parent company Volkwagen AG was found to have deliberately and dishonestly deceived the Australian government and people about some of its vehicles' exhaust emissions for nearly five years until October 2015.
Volkswagen initially defended the court proceeding brought by the Australian Competition and Consumer Commission but eventually settled together on a penalty of $75 million.
The ACCC approach was described as "overly pragmatic" and the amount was deemed manifestly inadequate by Justice Lindsay Foster.
Justice Foster significantly increased the fine to $125 million, and described it as an "egregious breach of Australian consumer law of the worst kind imaginable".
Volkswagen appealed on seven grounds saying it had been a miscarriage of justice for a number of reasons.
These included that the fine was manifestly excessive and the company had already been penalised in other jurisdictions including in America for $US2.8 billion.
But three appeal judges dismissed all grounds of appeal bar one minor error found to be made regarding consumer law, but stated it was "immaterial" to the outcome.
They also deemed the amount appropriate stating it was "not excessive let alone manifestly excessive".
Facts of the case show Volkswagen evaded emission standards in Australia by installing a "two mode software" causing different emissions to be released depending on how the vehicle was operated.
One mode of operation reduced pollution while the other increased it.
"It suffices to note that the software was designed, created and in due course implemented for the purpose of evading and defeating emissions standards tests," Justice Foster wrote.
Volkswagen 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 the "defeat devices" were exposed by the US Environmental Protection Agency and Volkswagen acknowledged the "moral and political disaster" their "test manipulations" had created.
