False and Exaggerated Emission Claims... Mercedes-Benz Korea Fined 20.2 Billion KRW

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[Asia Economy Sejong=Reporter Dongwoo Lee] Mercedes-Benz, which falsely advertised the performance of emission reduction devices in diesel vehicles, will be sanctioned by the Korea Fair Trade Commission (KFTC).

On the 6th, the KFTC announced that it decided to impose a corrective order and a fine of 20.2 billion KRW on Mercedes-Benz Korea Co., Ltd. and Mercedes-Benz Aktiengesellschaft (German headquarters) for misleading or false labeling and advertising of the emission reduction performance of their diesel passenger cars.

According to the KFTC, Mercedes-Benz advertised that their diesel passenger cars reduce nitrogen oxides, the main cause of fine dust, by up to 90% and meet the Euro 6 emission standards. However, investigations revealed that the installation of emission manipulation software caused the nitrogen oxide reduction devices to perform below the advertised levels under normal driving conditions.

In fact, Mercedes-Benz installed illegal software that degrades the performance of emission reduction devices such as SCR (Selective Catalytic Reduction) about 20 to 30 minutes after engine start, significantly reducing the amount of urea injection and causing nitrogen oxide emissions to exceed the permissible limits by 5.8 to 14 times.

Mercedes-Benz argued that since over 90% of domestic passenger car trips end within 30 minutes of starting, driving beyond 30 minutes cannot be considered typical driving conditions.

However, the KFTC judged that considering there are over 4 million (4,352,406) trips per day exceeding 30 minutes, such driving cannot be regarded as exceptional. The deliberate installation and concealment of software that degrades SCR performance and advertising the theoretical maximum performance of SCR was deemed to go beyond mere exaggeration or falsehood.

The KFTC also found that Mercedes-Benz violated the Air Quality Preservation Act, which strictly prohibits the installation of such illegal programs, and recognized that the labeling and advertising claiming compliance with the Air Quality Preservation Act were false.

Moreover, considering that consumers cannot directly measure or verify nitrogen oxide emissions, they have no choice but to trust the business operators' claims about emission reduction performance. Given Mercedes-Benz’s status as the top imported car seller in Korea and its high brand trust, the KFTC added that consumer misunderstanding was likely greater.

The KFTC stated that with this action, it has concluded sanctions under the Labeling and Advertising Act against emission manipulation by five imported car companies that occurred after the so-called first Dieselgate. Previously, in September last year, the KFTC imposed fines of about 1.1 billion KRW on Audi, Volkswagen, and Stellantis (Chrysler), issued a fine of 173 million KRW to Nissan and Korea Nissan, and issued corrective orders to Porsche AG and Porsche Korea.

The KFTC said, "We have strictly sanctioned the top imported car seller in Korea for obstructing consumers’ rational purchasing decisions through false and deceptive advertising of emission reduction performance even after the first Dieselgate," and added, "We will continue to monitor acts that hinder consumers’ rational purchasing decisions by providing incorrect information about performance and efficacy, which are important criteria for product selection."

This content was produced with the assistance of AI translation services.