Mercedes fined $12.5 million over failure to communicate dangers in airbag recall

The Federal Court ordered Mercedes-Benz Australia on Friday to pay $12.5 million in penalties for describing the recall of potentially deadly airbags to its customers as a “precaution”.

The German car company admitted that it breached Australian consumer law by failing to issue proper warning when recalling Takata airbags between March 2018 to July 2020, which had the potential to mis-deploy, causing death or injury.

The Australian Competition and Consumer Commission issued proceedings against the company early last month in the Federal Court, alleging Mercedes-Benz failed to comply with the recall notice issued by the assistant Treasurer in 2018, which required suppliers to communicate with consumers in a way that emphasised the danger of the Takta airbag.

The notice applied to affected Takata airbag inflators, commonly known as Alpha or Beta airbags. In Australia, the mis-deployment of these airbags resulted in the death of one person and seriously injured another, in two separate incidents.

While Mercedes-Benz did issue recalls, it failed to use “attention-capturing, high-impact language when communicating with consumers”. Instead, in conversations with 27 customers, call centre staff described the recall as a “precaution”, or words to that effect.

On four of those occasions, the company also made statements that the Beta version of the inflators used in other manufacturers’ vehicles had not had any faults or caused any accidents, injuries or deaths.

In one statement, a staff member told a customer that they were “still OK to drive your vehicle up until the point of completion of this recall, and that’s due to the fact that the Beta hasn’t shown any faults”.

In another conversation, a customer was told that “we’ve not actually had any problems with our airbags but we are recalling them for customer peace of mind anyway”.

“The statements made by Mercedes-Benz staff had the potential to give the impression to consumers that the airbag replacement was less urgent than was warranted by the real risks posed by the faulty airbags,” consumer watchdog deputy chair Delia Rickard said on Friday.