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18th Jan 2020

VW to pay €13bn for US pollution cheat

  • Volkswagen at a North American car show (Photo: Dave Pinter)

Volkswagen Group (VW) has agreed to cough up €13.2 billion to compensate the United States for the damage it did with its illegal cheating software, the plaintiff's committee announced on Tuesday (28 June).

“If approved by the Court, this will be the largest consumer auto industry class action settlement in US history,” the committee said, referring to a Californian tribunal adjudicating the settlement.

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VW will provide around €9 billion for a compensation fund. The money will be used to buy back cars from consumers if they want to, but also to give most owners of affected cars between €4,600 and €9,000 each.

The settlement was brokered between VW, consumers, and the US government.

It also includes VW providing €2.4 billion into a fund that will be used to repair the environmental damage the car company did by producing diesel cars that were more dirty than they appeared to be in the test laboratory.

The German industry giant will be required to commit a further €1.8 billion “to promote zero emissions vehicle technology”.

“This historic agreement holds Volkswagen accountable for its betrayal of consumer trust, and requires Volkswagen to repair the environmental damage it caused,” said Elizabeth Cabraser, who chaired the committee that negotiated the settlement on behalf of class suit members.

The news may cause some envy on the European side of the Atlantic, where VW has not planned to compensate any owners of a car with the cheating software.

What about Europe?

Ahead of the announcement, EU industry commissioner Elzbieta Bienkowska and the European Consumer Organisation (BEUC) repeated their calls for VW to compensate European car owners also.

"Volkswagen should voluntarily pay European car owners compensation that is comparable with that which they will pay US consumers," Bienkowska told the German Welt am Sonntag newspaper.

“EU consumers have been misled in the same way as US drivers, they deserve the same treatment,” BEUC said in a statement.

Last April, the Germany company said it had put €16.2 billion aside to deal with the cheating scandal.

The Californian court still has to approve the settlement, but this is expected to be a formality.

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