FTC probes VW ads’ claims to ‘clean diesel’

Korea’s Fair Trade Commission has launched an investigation into allegations that the scandal-ridden Volkswagen Group misled Korean customers about its vehicles being overly eco-friendly and fuel-efficient, it was revealed Monday.

If proved, the German carmaker may face fines of up to 2 percent of its sales in the country, the authorities said.

The Korean government last week had slapped a recall order on 125,522 Volkswagen vehicles that are suspected of being equipped with its controversial emission-rigging program to get higher energy-saving grades in the country. The vehicles are estimated to be worth more than 3.5 trillion won ($3.2 billion).

According to industrial insiders, the antitrust agency told Volkswagen Korea to submit all documents and video files about its TV commercials and promotional materials -- which highlighted that its diesel engine cars passed the U.S. and the European homologation tests with high scores.

Since 2009, Volkswagen Korea has branded its diesel engines as “clean diesel,” “eco-friendly” and “Blue Motion” -- the company’s original emission reduction technology -- in promotions.

The Environment Ministry on Nov. 26 confirmed that six of the seven Volkswagen diesel models researched were programmed to fabricate the test results. The authorities also revealed that some of the cars emitted up to 31 times higher nitrogen oxide than the government standard.

For these misdemeanors, the carmaker should be punished for violation of laws that ban misleading, falsified, and unjustified advertisements and promotions, claimed lawyers at Daeryook & Aju, a law firm that has filed a complaint against Volkswagen Group with the FTC. It was retained by two Volkswagen car owners earlier this month.

The FTC declined to comment about the ongoing issue. But market insiders said that should FTC convict Volkswagen, this could affect the ongoing civil litigation jointly filed by more than 1,999 Volkswagen owners here against the carmaker’s global headquarters as well as its Korean operations.

By Bae Ji-sook(baejisook@heraldcorp.com)