The automotive industry just cannot catch a break these days. You may remember a couple of months ago we blogged about some serious fines being imposed by US regulators. Then it was a $55.5 million criminal fine for fixing the price of shock absorbers given to Hitachi Automotive Systems. Now, it is Korean giants Hyundai Motor Co and its affiliate Kia Motors Corp in the firing line.
To restate or not to restate…
Hyundai/Kia have agreed to pay $41.2m to settle a 33 state investigation in the US.
The investigation related to a “restatement” of Hyundai/Kia’s fleet wide average fuel economy from 27 mpg to 26 mpg in 2012 and comes with the backdrop of intense scrutiny on the industry, given the VW emissions scandal.
The settlement was not a punitive fine. There was no admission of liability regarding breaches of consumer protection law. The settlement apparently sought to reflect the costs incurred by the various attorneys general investigating the case.
In 2014 the US government imposed a $300 million penalty in a combination of cash and regulatory credits on the firms. This was, similarly, for overstating fuel economy ratings. On this basis, it is understandable that Hyundai/Kia would be keen to reach a settlement with the investigating authorities.
If you would like to discuss any of the issues covered in this article or require any advice about consumer protection, regulatory issues, business ethics or competition law issues, please contact Rod Lambert, Paul Marshall or Charles Livingstone in Brodies’ Public Law and Regulatory Team.