ACCC takes Mercedes-Benz to court over Takata recall

The local arm of Mercedes-Benz has been accused of minimising the risk of defective Takata airbags in Federal Court proceedings lodged today by the Australian Competition & Consumer Commission (ACCC).

In doing so, the ACCC alleges Benz failed to comply with its obligations under the compulsory recall for replacement of potentially deadly Takata airbags ordered by the federal government in 2018.

In the action the ACCC is seeking declarations, pecuniary penalties, an order requiring a product recall compliance program, and costs.

In a statement to carsales, Mercedes-Benz Australia/Pacific said:

"Mercedes-Benz Australia is aware that a proceeding has been commenced against it by the ACCC in the Federal Court of Australia.

"The ACCC alleges that Mercedes-Benz Australia has breached its obligations under the Takata Airbag Recall Notice in relation to the way it communicated with certain owners who contacted its Takata call centre during the period of the recall.

"Mercedes-Benz Australia is committed to ensuring the safety of its customers and takes its compliance with its Australian Consumer Law obligations seriously. Mercedes-Benz Australia has co-operated with the ACCC throughout its investigation and has taken steps to improve its internal systems and call centre operations to address ACCC concerns.

"Mercedes-Benz vehicles do not contain Takata ‘Alpha’ airbags identified as critical by the ACCC, and the recall process overseen by the ACCC did not require affected Mercedes-Benz vehicles to be off the road or owners to cease driving them until the repair was undertaken.

"As the Recall Notice did not require Mercedes-Benz owners to cease driving their vehicles, Mercedes-Benz Australia does not understand how saying an owner could continue to drive their vehicle could be a breach of the Recall Notice.

"In Australia, the compulsory Takata airbag recall commenced during March 2018. Owners of Mercedes-Benz vehicles with affected Takata airbags have been sent at least six written letters, including one registered letter, using high-impact language in the form approved by the ACCC under the Recall Notice, together with emails and SMS messages where those contact details are held, which emphasise the importance and urgency of the recall, and encourage them to bring their vehicles in for repair.

"To date, the affected airbags have been replaced in 97.7 percent of the Mercedes-Benz vehicles involved in the recall. However, there are owners who have not brought their vehicles in for a complimentary airbag replacement. Mercedes-Benz Australia continues to contact the owners of the outstanding vehicles for the purpose of booking airbag replacements as soon as possible. We urge those owners to contact their authorised Mercedes-Benz retailer immediately, or contact us on 1300 659 307 to arrange a booking."

Defective Takata airbags have been blamed for one death and three injuries in Australia and 33 deaths globally.

Takata airbags affected by the compulsory recall use a chemical called phase-stabilised ammonium nitrate (PSAN). Certain types of Takata PSAN airbags have a design defect that may cause the airbag to deploy with too much explosive force so that sharp metal fragments shoot out and hit vehicle occupants, potentially injuring or killing them.

Car manufacturers have successfully recalled 99.9 per cent of more than three million vehicles and 4.1 million affected airbags in Australia. Globally, an estimated 100 million vehicles are affected.

The recall includes both Alpha and Beta Takata airbags, the former identified as posing the highest risks. However, the Australian death was caused by a Beta airbag.

All Mercedes-Benz vehicles recalled in Australia were fitted with Beta airbags.

In a media statement, the ACCC said the Australian recall notice required suppliers to communicate with consumers in a way that emphasised the danger of the Takata airbags, particularly the risk of serious injury or death from misdeployment of the airbag inflator. It also required suppliers to draw attention to the urgency of having airbags replaced.

The ACCC alleges that, between July 2018 and March 2020, in communications with consumers, Mercedes-Benz contravened the Takata compulsory recall notice by minimising the risks associated with defective Takata airbags and failing to use attention-capturing, high-impact language to avoid consumers ignoring recall notices. 

The ACCC alleged that on at least 73 occasions, Mercedes-Benz call centre staff made representations to consumers by phone or email to the effect they were undertaking the recall as a precaution; that it was still OK (or safe) to drive vehicles that were over six years old; or there had been no incidents, accidents, injuries or deaths caused by Beta airbags, either in Mercedes-Benz vehicles, or at all.

“These alleged representations used language which was inconsistent with the requirements of the compulsory recall notice,” the ACC statement read.

“Further, it is not correct that there have been no incidents. In fact, there have been incidents in Australia and overseas involving Beta airbags including, in Australia, one incident resulting in a fatality and another resulting in very serious injuries to the driver.

“The ACCC is also aware of reported misdeployments overseas of Takata airbags fitted in Mercedes vehicles.”

ACCC Deputy Chair Delia Rickard was also quoted in the statement.

“It was a very important part of the compulsory recall that consumers were made aware in all communications from vehicle manufacturers of the risks of serious injury or death from defective Takata airbags, and the importance of having these airbags replaced as soon as possible,” Ms Rickard said.

“We allege that Mercedes-Benz exposed consumers to the risks of serious injury or death because it used language which minimised these risks, and gave the impression that the recall was precautionary and that there was no urgency in having the airbags replaced.”

This isn’t the first time Mercedes-Benz has run afoul of the ACCC during the Takata recall.

In 2020 Benz acknowledged in a court-enforceable undertaking that it had failed to initiate a recall of certain C-Class and E-Class models with faulty Takata airbags, due to spare parts availability, therefore not complying with the timeframe required under the Takata compulsory recall.