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Antitrust watchdog probes VW over clean diesel ads

(AP-Yonhap)
(AP-Yonhap)
The nation’s antitrust watchdog has launched a full-scale investigation upon suspicions that Volkswagen Korea ran false advertisements about vehicles for which it had rigged emissions tests, officials said Friday. 

The probe is expected to strike a blow to the Korean unit of the German carmaker, which is already facing a separate criminal probe and a series of class action suits both in local and U.S. courts.

The Fair Trade Commission is zeroing in on speculation that the carmaker claimed to have passed U.S. and European emissions tests with excellent results, satisfying requirements for the Euro 5 standards.

“We are closely looking into whether VW vehicles have met the Euro 5 standards just like the company advertised,” a FTC official said.

The Euro 5 standard is an emission regulation adopted by the EU to limit pollutant emissions, such as nitrogen oxides and particulate matter from diesel and petrol cars, to protect public health and curb environmental problems.

From 2009, Volkswagen sent out advertisements claiming it passed emissions tests in the U.S. and Europe, using specific terms such as “Clean Diesel,” “Eco-friendly” and “Blue Motion.”

According to industry sources, the FTC has already ordered Volkswagen to submit relevant documents on its emission-rigging schemes and how it misled customers by running false advertisements.

Volkswagen, for instance, claimed that its diesel-powered Tiguan satisfied the Euro 5 Standards, despite the model having software that intentionally rigged emissions testing results.

If found to have deceived consumers by sending out false advertisements, Volkswagen could face fines of up to 2 percent of its sales. Volkswagen Korea sold about 125,000 cars equipped with the cheat device, worth approximately 3.5 trillion won ($2.92 billion).

The FTC could send the case to the prosecution and bring more civil lawsuits.

Legal experts say that consumers can hold Volkswagen Korea responsible if the FTC confirms that Volkswagen has violated the law on labeling and advertisements. 

On Wednesday, Seoul Central District Prosecutors’ Office launched a separately probe into a criminal suit filed by the Environment Ministry against VW Korea. The ministry sued Johannes Thammer, managing director of Audi Volkswagen Korea, for failing to satisfy the nation’s legal requirements in its recall plan.

The surprising move came after the ministry revoked the certification for tested models and banned their sales in November. It also fined the German carmaker about 14 billion won, drawing harsh criticism from the public for being too soft.

By Cho Chung-un (christory@heraldcorp.com)

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