U.S. FTC sues Volkswagen for falsely advertising its diesel vehicles were environmentally friendly

WASHINGTON – The U.S. Federal Trade Commission sued against Volkswagen AG for falsely advertising that thousands and thousands of its diesel vehicles were eco-friendly, when the German automaker knew these were actually emitting excess pollution.

The FTC filed suit in U.S. District Court in San Francisco, stating that U.S. consumers suffered “billions of dollars in injury” because of VW’s deception.

The automaker has admitted to presenting undisclosed software that allowed 580,000 diesel vehicles built since 2009 to emit as much as 40 times legally allowable pollution.

The Justice Department sued VW for up to US$46 billion in January for violating environmental laws and VW faces a lot more than 500 civil lawsuits associated with excess emissions, along with suits from some U.S. states. Last week, a federal judge set an April 21 deadline for VW to come up with a concrete fix for the vehicles.

VW spokeswoman Jeannine Ginivan said the automaker has received the FTC complaint and “continues to cooperate” with all U.S. regulators. “Our most significant priority is to locate a means to fix the diesel emissions matter,” Ginivan said.

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VW has an ongoing internal investigation to find out who in the automaker knew of the diesel cheating.

The FTC needs a order from the court requiring Volkswagen to compensate U.S. consumers who purchased a polluting vehicle and an injunction to avoid future similar conduct by Volkswagen.

The FTC said VW’s claims “that the cars were low-emission, eco-friendly, met emissions standards and would conserve a high resale value” were false. It said the vehicles involved sold for an average cost of approximately US$28,000.

“For years Volkswagen’s ads touted the company’s ‘Clean Diesel’ cars though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests,” said FTC Chairwoman Edith Ramirez.

The FTC said VW promoted its “clean” cars through a high-profile marketing campaign that cost millions of dollars that included Super Bowl ads, online social media campaigns and print advertising, “often targeting environmentally conscious” consumers.”

VW remains in talks with the U.S. Environmental Protection Agency, California Air Resources Board and Justice Department over the relation to a settlement. U.S. District Judge Charles Breyer and lawyers for the government and VW said last Thursday that the sides had made “substantial progress” toward a settlement.

A settlement could include vehicle buybacks and funds incentives to repair the vehicles, together with environmental funds to address excess emissions. A central point of the contention is whether or not California and also the EPA need a remedy which will address only part of the excess emissions.

? Thomson Reuters 2016