Volkswagen AG declared by consent that it breached the ACL by making false representations about compliance with Australian diesel emissions standards. The company admitted that, when it sought approval to supply and import more than 57,000 vehicles into Australia between 2011 and 2015, it did not disclose to the Australian Government the existence of ‘Two Mode’ software. Volkswagen admitted that when switched to ‘Mode 1’ for the purposes of emissions testing, the software caused its vehicles to produce lower nitrogen oxide (NOx) emissions, but that when driven in on road conditions, the vehicles switched to ‘Mode 2’ and produced higher NOx emissions.
ACCC Chair Rod Sims said
Volkswagen’s conduct was blatant and deliberate.
This penalty reflects a trend of ever higher penalties for breaches of Australian consumer law.
The previous highest penalties of $10 million for Coles, Ford and Telstra were recently overtaken by penalties of $12 million against We Buy Houses and then penalties of $26 million ordered against vocational training provider Empower Institute.
Today’s $125 million in penalties were imposed under the old penalty regime of up to $1.1 million per breach. Under laws that came into effect later last year, maximum penalties are now the higher of $10 million, three times the profit or benefit obtained or, if this cannot be determined, 10 per cent of turnover
Essentially, Volkswagen’s software made its diesel cars, utes and vans operate in two modes. One that was designed to test well and another that operated when the vehicle was actually being used and which produced higher emissions. This was concealed from Australian regulators and the tens of thousands of Australian consumers driving these vehicles. Volkswagen engineers designed the Two Mode software in 2006 and it was kept secret until it was discovered in 2015. All new motor vehicles supplied or imported into Australia must comply with Australian standards for exhaust emissions.
If the affected Volkswagen vehicles had been tested while operating in the mode Australians were driving in, they would have exceeded the NOx emissions limits allowed in Australia.Volkswagen also admitted that it made false representations when applying for the vehicles to be published on the Government’s Green Vehicle Guide website.
The ACCC has meanwhile announced delays in. rollout of the Consumer Data Right (CDR) -
In December 2018, the Treasurer announced the sharing of banking data under the Government’s consumer data right would commence in February 2020. The ACCC draft CDR Rules, which were released on 2 September 2019, detail a phased roll-out of the sharing of consumer data and product reference data (PRD) across the whole of the banking sector over a two year period. Unfortunately, it will not be possible to complete sufficient testing for a February 2020 launch. It is best to get the build of the system right and take steps to have confidence in its secure operation. As a result, the implementation timetable will be adjusted so that the obligations for the four major banks to share consumer data will now commence on 1 July 2020, and those obligations that were to commence in July will be deferred to November 2020.
Specifically:
- major banks will be required to share consumer data relating to credit and debit cards, deposit accounts and transaction accounts from 1 July 2020
- major banks will be required to share consumer data relating to mortgage and personal loan accounts from 1 November 2020.
- Major banks will be obliged to share certain more complex data sets including relating to joint accounts, closed accounts, direct debits and scheduled payments from 1 November 2020.
Obligations to share PRD will remain unchanged. That is:
- major banks will be required to share PRD for credit and debit cards, deposit accounts, transaction accounts, mortgage and personal loan accounts from 1 February 2020
- non-major banks will be required to share PRD for credit and debit cards, deposit accounts and transaction accounts from 1 July 2020.
The ACCC will make the CDR Rules to reflect these changes in January 2020.
Further consideration will be given to the implementation timing for sharing of consumer data by the non-major banks and the on-boarding of additional accredited data recipients in the first quarter of 2020.
Entities other than the major banks, who choose to enter CDR early, for instance by becoming an accredited data recipient, will not be obliged to commence sharing consumer data prior to November 2020. Consequential changes may be required to the Rules as a result.
