By Lee Hyo-sik
The Fair Trade Commission (FTC) has ordered Audi Volkswagen Korea (AVK) to pay a 37.3 billion won ($32 million) fine for running false advertisements on its emissions-rigged diesel engine vehicles.
The antitrust agency said Wednesday that the 37.3 billion won is the largest fine it has ever imposed on corporations for posting false advertizing. It has also decided to file a complaint with the prosecution against AVK CEO Johannes Thammer, former Volkswagen Korea CEO Park Dong-hoon and three other top company executives.
The agency said AVK and its German headquarters misled Korean consumers with false television and print-media advertisements by inflating fuel economy, emissions and other performance-related features of its Euro 5 diesel engine vehicles.
The German carmaker ran the advertisements from December 2007 through November 2015, falsely declaring its pollution-emitting diesel-powered cars as eco-friendly ones. Millions of Volkswagen vehicles sold in Korea and elsewhere over the past few years failed to meet the Euro 5 emissions standard. The company admitted installing controversial software that enabled its cars to detect when their emissions were being tested and to lower them.
"AVK ran false advertisements to promote the sale of its controversial diesel cars," an FTC official said. "The ads falsely claimed the vehicles were environment-friendly and met emissions and other standards. The German automaker intentionally deceived Korean consumers."
The official said consumers can use the FTC's latest action against Audi Volkswagen as evidence in an ongoing class-action lawsuit, seeking millions of dollars in compensation from the carmaker. "We will bolster our monitoring of dubious corporate advertizing and take harsh action against lawbreakers."
AVK said it has not yet been notified by FTC, adding that it will take appropriate action after reviewing the agency's decision.
"At the moment, we cannot say anything because we have not yet been informed by the FTC," an AVK official said. "We will decide what to do after studying the FTC's decision."
Earlier, the Ministry of Environment imposed a 17.8 billion won fine on AVK and filed a criminal suit against the company over its emissions-cheating scandal. The ministry also banned the sales of the 80 of the carmaker's vehicle models.
AVK has submitted plans to recall more than 120,000 diesel-engine vehicles sold in Korea to the ministry three times.
But ministry officials rejected the plans, saying they did not include some key elements, such as the cause of defects and detailed plans to improve the vehicles' fuel economy and other functions after the defeat software was removed.
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| Johannes Thammer Audi Volkswagen Korea CEO |
The antitrust agency said Wednesday that the 37.3 billion won is the largest fine it has ever imposed on corporations for posting false advertizing. It has also decided to file a complaint with the prosecution against AVK CEO Johannes Thammer, former Volkswagen Korea CEO Park Dong-hoon and three other top company executives.
The agency said AVK and its German headquarters misled Korean consumers with false television and print-media advertisements by inflating fuel economy, emissions and other performance-related features of its Euro 5 diesel engine vehicles.
The German carmaker ran the advertisements from December 2007 through November 2015, falsely declaring its pollution-emitting diesel-powered cars as eco-friendly ones. Millions of Volkswagen vehicles sold in Korea and elsewhere over the past few years failed to meet the Euro 5 emissions standard. The company admitted installing controversial software that enabled its cars to detect when their emissions were being tested and to lower them.
"AVK ran false advertisements to promote the sale of its controversial diesel cars," an FTC official said. "The ads falsely claimed the vehicles were environment-friendly and met emissions and other standards. The German automaker intentionally deceived Korean consumers."
The official said consumers can use the FTC's latest action against Audi Volkswagen as evidence in an ongoing class-action lawsuit, seeking millions of dollars in compensation from the carmaker. "We will bolster our monitoring of dubious corporate advertizing and take harsh action against lawbreakers."
AVK said it has not yet been notified by FTC, adding that it will take appropriate action after reviewing the agency's decision.
"At the moment, we cannot say anything because we have not yet been informed by the FTC," an AVK official said. "We will decide what to do after studying the FTC's decision."
Earlier, the Ministry of Environment imposed a 17.8 billion won fine on AVK and filed a criminal suit against the company over its emissions-cheating scandal. The ministry also banned the sales of the 80 of the carmaker's vehicle models.
AVK has submitted plans to recall more than 120,000 diesel-engine vehicles sold in Korea to the ministry three times.
But ministry officials rejected the plans, saying they did not include some key elements, such as the cause of defects and detailed plans to improve the vehicles' fuel economy and other functions after the defeat software was removed.
