“The Italian Job” – Italy’s Antitrust Authority has fined Volkswagen 5 million euros in the car emissions scandal

The blows for Volkswagen don’t seem to end.

In August, Italy’s Antitrust Authority (AGCOM) fined the German manufacturer 5 million Euros.

The authority are alleging that VW misinformed vehicle owners of the real diesel emissions results. The case concerns vehicles sold by VW between 2009 and 2015, but includes Audi, Seat and Skoda.

A member of our team recently attended a conference in Brussels where a delegate from the Italian group involved in the case was in attendance.

Currently, Italy are the only Member State in the EU to bring a public body claim against VW, and it’s not surprising given the lack of results in terms of compensation for European victims; especially in comparison to our American counterparts, where in June this year, VW U.S. settled a claim for $14.7 billion with the Environmental Protection Agency and their consumers.

Positive step forward

The antitrust group are doing everything in their power to punish VW AG and their subsidiary company VW Group Italia for producing, marketing, and supplying vehicles to customers that had the “defeat devices” installed in them, which polluted more than what was advertised.

Since 2009, VW Italia has marketed the diesel vehicles with engines, known as EA189 EU5, installed with software that could switch the emissions controls on to produce lower emissions within the expected limits during testing, and then switch them off in normal driving mode. Consequently, more toxic nitrogen oxide emissions were produced than what was expected in real world conditions.

The antitrust authority said:

“VW’s claims about emissions and certifications in advertising campaigns and information brochures distributed by dealers might have induced consumers to make an error in their choice (source).”

Effectively, what the body is concerned with is that customers may not have made the same purchase decision had they not have been misled by the advertising of the “eco-friendly and green” vehicles in the first place. By circumventing the emissions testing, thousands of customers have been arguably misled, which is deemed to be an “unfair commercial practice” pursuant to domestic Consumer Code.

Information provided in catalogues and advertisements highlighted the manufacturer’s environmental awareness, which could have had an effect on customers when they were purchasing the vehicles, according to the authority. This could be because buyers subconsciously like to see that a company takes corporate social responsibility, and like to be involved with ‘doing good for the environment’.

The challenge

It does not come as a surprise that VW are unhappy about the claim and the financial penalty imposed on them. In response, VW’s Italian subsidiary company has planned to contest the fine in the Administrative Court. We can only presume that their concerns are that this may open the floodgates to other claims from other public bodies across Europe.

This is something that I am sure VW do not want to deal with.

This may inspire and influence other countries and states to bring public cases against the German manufacturer. Since the scandal in 2015, VW has faced criminal investigations worldwide, including in the U.S., South Korea, Australia and Europe. The step that the Italian antitrust authority has taken may be useful for further public cases to be brought against VW.

Current position

VW’s credibility has taken a huge hit. The scandal has led to a drop in sales and market shares, with the chief executive resigning in the immediate fallout of the scandal breaking. The incalculable costs that VW has racked up has pushed VW into the red for the first time in over 20 years in 2015, according to DW (http://www.dw.com/en/dieselgate-cheating-costs-vw-55-million-euros-in-italy/a-194597050). The majority of the costs seem to be paying out for the regulatory fines and legal proceedings.

Failing to learn from the past?

VW are no strangers to breaching EU antitrust laws. In January 1998, the German automotive giants were fined 90 million Euros for preventing Austrian and German customers purchasing cheaper VW vehicles in Italy. If history repeats itself, VW will be fighting a losing battle in its appeal. The case went all the way to the European Court of First Instance, and then found in favour of the Commission. The ruling was supported by the then Competition Commissioner, Mario Monti who said: “…by upholding such rights, competition policy directly serves citizens”. This could be a possible outcome for the current case and the Administrative Court may find in favour of the customers who were wrongfully cheated when they bought the vehicles.

We eagerly await the appeal judgment. This could pave the way for potential claims brought by public bodies like the Italian Antitrust Authority. In the meantime, VW should sit tight for the bumpy ride ahead. If you have been affected by the VW car emissions scandal, come forward now and let our experienced and dedicated lawyers deal with your claim.