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Canada - Volkswagen and Audi to pay up to $2.1 billion to consumers and $15 million penalty for environmental marketing claims

19 December 2016

The Competition Bureau participated in a proposed Canadian class action settlement agreement that Volkswagen reached with consumers of certain 2.0 litre diesel vehicles. This settlement, if approved by the courts, will provide buyback and restitution payments to those consumers totalling up to $2.1 billion — one of the largest consumer settlements in Canadian history. The result of this settlement was a determining factor in the Bureau reaching a consent agreement with Volkswagen Group Canada Inc. and Audi Canada Inc. (Volkswagen Canada and Audi Canada) that provides for an additional monetary penalty of $15 million.

The consent agreement, which is registered with the Competition Tribunal and has the force of a court order, was negotiated to address the Bureau’s conclusions that false or misleading environmental marketing claims were used to promote certain vehicles with 2.0 litre diesel engines. The Bureau’s investigation found that Volkswagen Canada and Audi Canada misled consumers by promoting vehicles sold or leased in Canada as having clean diesel engines with reduced emissions that were cleaner than an equivalent gasoline engine sold in Canada. The vehicles passed applicable emissions tests because software was installed that altered the operation of the vehicle during testing which appeared to have the effect of reducing emissions in testing.