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  (Source: Sting Ray Studios)

Toyota has recalled millions of vehicles, including the best-selling Camry for unintended acceleration problems. Toyota has now received a massive fine for trying to deceive U.S. federal regulators.  (Source: Torque Report)
Fine is largest in U.S. history against an automaker

The atmosphere at the U.S. Department of Transportation on Monday was tense as Secretary Ray LaHood slammed Japanese automaker Toyota.  Lahood announced, "We now have proof that Toyota failed to live up to its legal obligationsWorse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."

Defects are an automaker's eternal enemy.  Every year thousands, if not millions of vehicles are recalled for defects.  Toyota's critical problem was not so much the defects itself -- despite the massive number of vehicles involved.  Rather, Toyota's key mistake was the dangerous game of deception it reportedly played.

According to documents obtained from Toyota, the company began a recall on "sticky pedals" in September of last year in Canada and Europe.  However, it failed to inform U.S. regulators of the problem, and made no effort to launch a recall of the effected vehicles until it came under heavy fire in January.

That constitutes a gross violation of federal safety guidelines, which demand that an automaker inform the U.S. federal regulators within five days of discovering a defect.

As a result, the DOT has thrown the book at Toyota, proposing a $16.4M USD, the maximum penalty allowed under the law.  That fine far surpasses the biggest previous fine against an automaker -- $1M USD sum levied against General Motors for failing to promptly recall windshield wipers in 2002-2003 model vehicles.

Toyota has two weeks decide its response.  Despite the reportedly conclusive evidence, the Asian automaker is expected to appeal the decision, perhaps seeking a smaller fine.

Meanwhile, the National Highway Traffic Safety Administration (NHTSA) continues to investigate the sticky accelerators, unsatisfied with Toyota's claim that floor mats were solely to blame.  NHTSA is looking at a host of mechanical and electrical elements for bugs, and is even examining whether cosmic rays could play a role, with the help of experts from NASA.

The government continues to investigate Toyota's behavior during the recall, as well.  DOT officials said more fines could brought against Toyota if further proof of wrongdoing is revealed.

While the defect mess is unpleasant for all those involved it does raise some interesting questions about governance.  Some say that the government should not police companies, and that the commercial press should be left to investigate reports of defects and inform consumers of safety risk.  Others argue the current system is a successful one.  And still others argue that current regulation does not go far enough -- that the federal government should have the ability to levy even bigger fines against companies who knowingly make products that could endanger U.S. consumers.

Likewise, the 135 pending lawsuits against Toyota raise similar questions.  Some argue that allowing such free litigation against safety critical businesses, such as automakers and healthcare providers allows citizens to take regulation into their own hands.  Others argue that it hinders free enterprise, raising prices, and worse yet leads to bigger government.

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By rudy on 4/5/2010 10:17:52 PM , Rating: -1
I see M$ getting slammed with greater than 100 million dollar fines left and right, what about the display and ram fines for price fixing those were all hundred million plus. It seems funny that this is the biggest fine somehow I think info has to be wrong.

RE: Amazing
By porkpie on 4/5/2010 10:26:42 PM , Rating: 5
This is the largest fine against an automaker.

Of course, if this had been the EU imposing a fine against Ford or GM, the total would be been more like $1.6B. Funding those social programs is expensive...

RE: Amazing
By porkpie on 4/5/2010 11:23:40 PM , Rating: 2
I guess our friends from Helsinki didn't like that comment...

RE: Amazing
By BZDTemp on 4/6/2010 9:54:00 AM , Rating: 4
LOL $1.6B would be a drop in the bucket as are the fines written out to Microsoft. The whole idea of running the EU on money fined to US companies is just silly and a clear sign of how little the people on DT knows about the EU.

For starters the EU is club with 27 countries and 495+ million people so do the math and imagine how little something like $1.6B is in that perspective.

I get it with all the "Home of the free. Land of the brave" or something to that effect and I also get that the EU is viewed as socialist with socialist really meaning communist in US ears but that is just so wrong. It is not like we have planned economy, lack of freedom, a one party system and what else comes from communism.

What we have is lots of freedom including the freedom of knowing we will never risk living on the street or being without health care. We also know education is free all the way so parent do not have to worry about how to pay and children don't have to feel guilty about their education being a burden on their parents. And the list goes on. We also do not have to worry our economy is so much in the toilet that China and OPEC now own us. And finally no one here is so fearful of their fellow man that they feel the need to own guns.

RE: Amazing
By bighairycamel on 4/6/2010 11:26:51 AM , Rating: 2
Right... because European countries are just rolling in surplus. Oh wait, those were my eyes rolling.

RE: Amazing
By porkpie on 4/6/2010 11:43:10 AM , Rating: 2
Exactly. The EU budget is about €120B a year. A few multi-billion dollar fines does boost the coffers amazingly.

Still, the primary reason driving these suits is political, rather than monetary. Fat and sassy American corporations are the very essence of capitalism in the minds of most Europeans, and actions against them are uniformly popular.

Fining a US firm wins votes and lines your pockets. It's a win-win situation for EU regulators.

RE: Amazing
By BZDTemp on 4/6/2010 12:37:12 PM , Rating: 4
An important note to make here is that the EU budget is kindda like the budget for running the club including the funds given out to members in need. The EU budget is aprox. 1% of the member countries combined GNI and comparing the EU budget width that of a country is not really making sense.

As for all the c.r.a.p. being told here on DT about how the EU is targeting US companies that is simply not so. The EU has strict laws to protect consumers in all matter of ways and for example 2 year warranty (with some fine print) is mandatory. If one buys something on a website there is a two week full refund right which includes shipping costs and so. The moves against companies/organisations abusing market positions, forming cartels and similar are harsh and can hit any company regardless of it's origin.

If anyone is trying to win votes here it is the US politicians trying to find anything to take peoples eyes of the mess made those very politicians.

RE: Amazing
By porkpie on 4/6/2010 12:49:41 PM , Rating: 3
"comparing the EU budget width that of a country is not really making sense."

That's not what we're doing. We're comparing the EU budget to the amount of money the EU is raking in from fining American firms. The percentage is quite sizable, as the numbers demonstrate.

"The EU has strict laws to protect consumers"

How is a browser ballot and multi-billion-dollar fines "protecting the consumer"? The browser market has never been healthier or more diverse before in all history.

RE: Amazing
By DominionSeraph on 4/5/2010 10:32:19 PM , Rating: 5
Microsoft isn't an automaker.

<100 IQ's should be restricted to verbal communication.

RE: Amazing
By Spuke on 4/5/2010 10:58:44 PM , Rating: 3
<100 IQ's should be restricted.
There, fixed it for you.

RE: Amazing
By 67STANG on 4/5/2010 11:08:35 PM , Rating: 3
I would guess that 80% of the people I encounter on a day-to-day basis are in the under 100. I'm also guessing that half the people that I work with are *barely* over 100-- and they all have at least 4 year degrees.

RE: Amazing
By porkpie on 4/5/2010 11:29:46 PM , Rating: 4
As Carlin says: imagine how stupid the average person is. Now realize half of them are even dumber than that.

RE: Amazing
By sapiens74 on 4/6/2010 12:10:42 AM , Rating: 3
As Carlin said: imagine how stupid the average person is. Now realize half of them are even dumber than that.

There fixed for you

He finally met his maker...

Or Joe Pesci

RE: Amazing
By The0ne on 4/6/2010 2:58:02 PM , Rating: 1
Don't become a Jason Mick guys!

RE: Amazing
By MadMan007 on 4/6/2010 2:06:57 AM , Rating: 2
I always crack up when people talk about percentages and IQ. IQ is defined as a bell curve with 100 at the peak. So it's unlikely that 80% of the people you encounter are below 100. The second sentence is probably right because *by definition* 50% of people are above 100 and 50% below 100. Now the only question is, given your lack of basic understanding of IQ, what's your IQ?

RE: Amazing
By porkpie on 4/6/2010 2:18:49 AM , Rating: 5
"the only question is, given your lack of basic understanding of IQ, what's your IQ?"

Oh, what delicious irony, given the error here is yours.

While IQ is normalized to a Gaussian curve across the entire population, few people interact with a truly random segment of that population. A researcher at Los Alamos, say, may well find the average person he meets has an IQ of 130, whereas the waitress at Joe's diner may find those around her averaging an IQ of only 90.

IQ has very marked variations by vocation, income and education level, and geography -- the very things people often use to choose those with which they associate. Therefore, very few people in the actual population will find that exactly half of their friends and acquaintances lie above or below the 100 IQ line.

RE: Amazing
By MadMan007 on 4/6/2010 11:27:36 AM , Rating: 2
Yes I realize that people may not interact with a wide range of people daily and of course it won't happen that exactly half fall above 100 and half below. Sorry that I didn't write a thesis about it in DT comments. That doesn't change the misunderstanding of IQ distribution. Having a 4 year degree quite frankly does not have much to do with IQ as implied by the post to which I replied. You take what I wrote much too literally when it was simply meant to show the common misunderstanding of how IQ is, by definition, distributed across a normal bell curve.

In fact your reply shows a lack of simple reading comprehension, I said 'unlikely' and 'probably,' neither of which means 'exact.

RE: Amazing
By porkpie on 4/6/2010 11:47:19 AM , Rating: 3
Your statement was wrong, period. Worse, you compounded your error by impugning the intelligence of the previous poster.

There was nothing in his original post to imply he lacked understanding of the definition of IQ nor, even if he did, would ignorance of what is essentially a trivial fact imply anything about his own intelligence. In other words, you're triply incorrect.

Three strikes, you're out.

RE: Amazing
By Mogounus on 4/6/10, Rating: -1
RE: Amazing
By Mogounus on 4/6/10, Rating: 0
RE: Amazing
By porkpie on 4/6/2010 1:16:10 PM , Rating: 2
Is English too complex a language for you? Madman is not correct, and my original post clearly explains why this is so.

Further, you've managed to miscomprehend what the debate is even about. No one is saying 80% of the population is below a 100 IQ". We are, rather, discussing the probability that the average population any single person interacts with is exactly at that mean value.

Quite a different topic altogether, but thanks for playing.

RE: Amazing
By FaceMaster on 4/6/2010 4:31:19 PM , Rating: 2
you've managed to miscomprehend what the debate is even about. No one is saying 80% of the population is below a 100 IQ". We are, rather, discussing the probability that the average population any single person interacts with is exactly at that mean value.

...This sort of nerdiness will doom Daily Tech's rep on the playground.

RE: Amazing
By rudy on 4/5/2010 11:35:01 PM , Rating: 2
So? My point is that is seems odd that companies with hundred billion dollar market caps are only fined 14 million as a record. Where as 100 million dollar fines are common place on this web site for tech companies most of which are of similar size.

RE: Amazing
By therealnickdanger on 4/6/2010 7:43:07 AM , Rating: 3
I see some irregularity in it all as well. Both Microsoft and Toyota are multi-billion dollar corporations that produce highly sought after products. However, Toyota's products can get you killed when they malfunction. Toyota gets slapped on the hand with a couple million for hiding safety problems that may have caused deaths. Meanwhile Microsoft faces fees, fines, and penalties in excess of $100 million for not including third party browsers in their OS (while Apple doesn't).

It's all B.S. IMO.

RE: Amazing
By paperfist on 4/6/2010 9:46:51 AM , Rating: 1
On top of that the people making fun of your IQ can't read between the lines. What do they say about book smart people not having common sense?

So how many people are going to die from RAM price fixing? How many people are in danger of M$ holding a monopoly?

Answer: Not as many people who have and yet still may die from Toyota's safety defects. So what the OP is saying is the punishment (fine) does not fit the crime :P

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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