Dyson has lost an appeal over a damages claim worth 176 million euros (£152 million), after the vacuum cleaner maker said it suffered losses as a result of empty-bag energy label testing.

The Court of Justice of the European Union (EU) dismissed Dyson’s appeal against the decision not to grant it compensation in 2021, a decision which the company described as “perverse”.

The British technology giant had won a five-year legal battle against European Commission regulation over how vacuum cleaners were tested for their energy efficiency, which were carried out when they were empty and had no dust.

Dyson, which makes bagless vacuum cleaners, said the testing process was a “sham” because it did not reflect “real-life” use of the equipment.

The ruling must be baffling for consumers across Europe who were so badly misled by this regulation. The Commission knew the label was a sham, yet forced it on consumers anyway

It also argued the testing disadvantaged newer bagless models in comparison with bagged models, where the performance decreases as the bag fills up.

The rules were annulled as a result of Dyson contesting them and the contentious label was removed from vacuum cleaners.

But the firm, which was founded by billionaire inventor Sir James Dyson, sought damages of 176.1 million euros (£151.7 million) from the European Commission over allegedly losing out on sales because of the lack of distinction.

The claim was rejected by the General Court of the EU in 2021, leading Dyson to accuse it of accepting the Commission’s “tortuous and weaselly excuses to avoid accepting liability for its wrongdoing”.

However, on Thursday, the EU Court of Justice said it confirms that the Commission “did not commit a sufficiently serious breach of EU law”, and therefore dismissed the compensation claim.

In a statement, Dyson said the regulation “misled hundreds of millions of European consumers and caused Dyson to suffer £150m in lost sales and investment, plus significant legal costs in pursuit of justice.

A spokesperson said: “The fact Dyson won its case makes today’s judgment on damages all the more perverse.

“As has been established, the Commission knowingly used a label that had the effect of misleading consumers over the true performance of vacuum cleaners for years.

“This judgment sets an unfairly high bar for manufacturers harmed by the European Union’s illegal acts, allowing its institutions to escape proper accountability.

“By refusing to compensate those harmed, it is giving a green light to others who seek to undermine lawful competition.

“The ruling must be baffling for consumers across Europe who were so badly misled by this regulation. The Commission knew the label was a sham, yet forced it on consumers anyway.”