Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission

The High Court of Australia considered an appeal by Volkswagen Aktiengesellschaft (Volkswagen) against a decision of the Full Federal Court concerning alleged contraventions of the *Australian Consumer Law* (ACL). The Australian Competition and Consumer Commission (ACCC) had brought proceedings against Volkswagen alleging that the company had engaged in misleading or deceptive conduct by representing that certain diesel vehicles sold in Australia complied with "Euro 5" emissions standards when, in fact, they were fitted with "defeat devices" designed to cheat emissions testing. The dispute centred on whether these representations were false or misleading in the context of Australian consumer protection law.

The primary legal issue before the High Court was whether Volkswagen's representations about the vehicles' compliance with Euro 5 emissions standards constituted misleading or deceptive conduct under section 18 of the ACL. This required the Court to determine the meaning and effect of those representations in the minds of consumers, and whether the presence of the defeat devices rendered those representations false or misleading, notwithstanding that the vehicles may have met certain technical specifications during regulated testing. The Court also considered the scope of Volkswagen's liability for the conduct of its related entities in Australia.

The High Court held that the representations made by Volkswagen were misleading. The Court reasoned that consumers purchasing vehicles represented as complying with Euro 5 standards would reasonably expect that the vehicles would comply with those standards in real-world driving conditions, not just under specific testing regimes. The presence of the defeat devices, which allowed the vehicles to perform differently in testing compared to normal driving, meant that the representations of Euro 5 compliance were false and misleading. The Court applied established principles of consumer protection law, focusing on the overall impression conveyed to consumers and the potential for deception, rather than a narrow technical interpretation of the emissions standards.

Volkswagen's appeal was dismissed, and the decision of the Full Federal Court was affirmed.