The action is in addition to existing ACCC proceedings against Audi parent company Volkswagen over the same issue in more than 57,000 Volkswagen branded vehicles during the same time period.
According to the ACCC, German company Volkswagen Aktiengesellschaft engaged in misleading conduct by installing 'defeat' software in Audi vehicles that produced lower nitrogen oxide emissions in laboratory testing than during typical driving conditions.
"Consumers expect that there is some relationship between the performance of the car as set out in the sales brochure and their day to day on-road use," said ACCC Chairman Rod Sims.
Volkswagen Aktiengesellschaft and its local subsidiary Volkswagen Group Australia are also alleged to have engaged in misleading conduct by claiming that Audi vehicles met Australian and European standards despite the presence of the defeat software.
"We allege that the installation of software which allows the vehicle to meet testing standards but then causes the vehicles to operate differently on the road, and associated representations about the vehicle and its performance, breach the Australian Consumer Law," said Mr Sims.
Volkswagen Group Australia launched a voluntary recall in December of almost 80,000 vehicles. The majority will receive a software update to repair the issue, while some may also require a "minor hardware update" according to the company.
Skoda vehicles sold by Volkswagen are also affected by the diesel emissions issue, but the ACCC said it has chosen not to pursue further action at this stage citing lower sales, as well as existing class actions and ACCC proceedings.
The ACCC is seeking declerations, penalties, corrective advertising, orders relating to the future use of findings of fact and costs.