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FTC sues Volkswagen for false advertising

[JURIST] The US Federal Trade Commission (FTC) [official website] filed suit Tuesday against Volkswagen AG (VW) [corporate website] for false advertising. VW's sales have taken a major hit in the US since the Environmental Protection Agency (EPA) [official website] revealed in September that VW had been cheating on diesel-emissions tests [WSJ report], contradicting the company's claims that its diesel vehicles were "green." More than 500 civil lawsuits from around the country have been consolidated in the San Francisco court against VW, and VW's brand image has suffered forcing its CEO and top US manager out of the company since the scandal surfaced. The FTC filed suit [complaint, PDF] in the US District Court in San Fransisco stating [Fortune report] that US consumers "suffered billions of dollars in injury as a result of the deception." The filing cites slogans from past campaigns showing that VW intentionally misled consumers, such as "Diesel. It's no longer a dirty word."

VW is facing legal difficulty around the world over the emissions scandal. A law firm in Germany filed a class action lawsuit [JURIST report] earlier this month against VW on behalf of investors alleging a breach of duty to the capital market. The €3.255 (USD $3.61 billion) lawsuit was brought in a Germany's multi-regional court in Brunswick. The US Department of Justice (DOJ) [official website] filed suit [JURIST report] against VW in early January for alleged violations of the Clean Air Act [EPA review]. The DOJ is also seeking billions of dollars in damages in a civil lawsuit. Last year the Braunschweig public prosecutor's office opened a criminal investigation [JURIST report] of former VW CEO Martin Winterkorn, following accusations that the company cheated on government emissions tests by manipulating exhaust valves. The investigation followed several criminal complaints, including one filed by VW, and came less than a week after Winterkorn stepped down as CEO of the company. In his statement he accepted "responsibility for the irregularities that have been found in diesel engines" and said that he was "clearing the way for this fresh start with [his] resignation." Breyer is currently overseeing hundreds of lawsuits, and 47 state attorneys general are also investigating.

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