SYDNEY (AFP) - Australia's competition watchdog Thursday (Oct 1) warned that Volkswagen could be hit with up to Aus$1.1 million (S$1.1 million) for each pollution-cheating device installed and in use in its cars in the country.
The German auto giant is facing its deepest-ever crisis after admitting up to 11 million diesel cars worldwide were equipped with sophisticated software that covertly switches on pollution controls when they undergo an emissions test.
The Australian Competition and Consumer Commission (ACCC) said it was still waiting for Volkswagen Group Australia to clarify how many of its cars in the nation were fitted with the so-called defeat devices.
"This enforcement investigation is a priority for the ACCC," chairman Rod Sims said in a statement.
The devices, if they are being used in the cars, would breach Australian safety standards, Sims added.
"Using defeat devices is specifically prohibited under the Australian Design Rules, which are picked up as Australian Consumer Law (ACL) mandatory safety standards," he said.
"As the enforcer of the ACL, the ACCC can take action against any corporation that has breached mandatory standards." The regulator said the maximum penalty for a company for each breach of consumer law was Aus$1.1 million.
According to estimates by Fairfax Media and News Corporation newspapers, up to 50,000 vehicles made by Volkswagen and Volkswagen's top-of-the-range Audi subsidiary could be fitted with the diesel engines that contain the devices.
This means Volkswagen could potentially face billions of dollars in Australian penalties, but such a huge fine would be unprecedented for the ACCC.
The ACCC said it was also looking into Audi Australia's comments Wednesday that some of its engines could be fitted with the device, although the carmaker said they were "inactive".
The watchdog's highest fines have stemmed from investigations into price-fixing in the Australian air cargo market by international airlines, with the Federal Court so far imposing Aus$58 million in penalties over the case.