VW says its profits will be unharmed

The European Court of Justice ruled that VW's main appeal "must be dismissed in its entirety".

The fine was the biggest ever imposed on a single company when it was set in 1998.

VW managed to win a 12m-euro reduction in the fine in 2000, while other companies have received higher fines in recent years.

VW was found to have sold its cars cheaper in Italy than in Germany and Austria, and taken steps to prevent customers from those countries from getting a better deal by buying in Italy.

It restricted supplies to Italian car dealers and offered them a bonus system that discouraged sales to non-Italian buyers, the Court said.

No pain for profits

VW has said the fine will have no impact on its profits, as it had already made provision for it.

VW's profits sagged the first half of 2003 to 1.01bn euros ($1.16bn; �717m), down 55% on a year earlier.

The car firm said the strength of the euro and slumping demand were to blame.

Sales held up well, but the firm's profits suffered from the impact of a costly restructuring.

Since the 1998 case, the European Union has introduced new rules on car sales to prevent unfair price differences between countries.