Mercedes-Benz fined $12.5m over Takata airbag saga

The Federal Court has issued Mercedes-Benz Australia/Pacific with a $12.5 million fine for not complying with the national Takata airbag recall communication plan.

According to the ACCC, the premium German auto brand’s local division breached Australian Consumer Law (ACL) when staff at its call centre played down the risks associated with the global recall and likened the whole situation to more of a precaution than essential and potentially life-saving requirement.

Five call centre staff – all contractors, according to Mercedes – were found to have not used “attention-capturing, high-impact language” in 27 different conversations with consumers when discussing the Takata recall and how it affected the vehicles along with the associated dangers.

There have been 33 confirmed fatalities and more than 350 injuries inflicted globally by the defective Takata airbags, including one of each here in Australia.

ACCC deputy chairperson Delia Rickard said this was the first time a company had been penalised for not complying with a mandatory recall notice and that the judgement “sends a strong signal” to companies, which “must comply with their product safety obligations under the ACL”.

“Given the risks of misdeployment increased over time, we were concerned about the risks of any potential for delay in having these faulty airbags replaced,” she said.

“The faulty Takata airbags have the potential to misdeploy and send sharp metal fragments into the vehicle cabin at high speed, which could kill or seriously injure the occupants.

“The faulty Takata airbags were a potentially deadly issue, and it was vital for the safety of Australian drivers and passengers that manufacturers took the risks seriously, and clearly communicated the risks to consumers.”

In a statement of its own, Mercedes-Benz A/P said it takes its ACL compliance “very seriously” and will establish a ‘product safety compliance program’ to reinforce its product recall obligations.

“We have co-operated with the ACCC in its investigation and reached an agreement to resolve the proceeding related to the Takata Airbag Recall,” said the company.

“The actions of Mercedes-Benz Australia were not deliberate.

“In 27 telephone exchanges from more than 50,000 calls between consumers and our dedicated Takata Call Centre, it was established that five contractors failed to use attention-capturing, high-impact language required by the recall notice, in contravention of the ACL.

“All of the consumers involved with the contravening interactions had their vehicles recalled and the inflators in those vehicles were replaced.”

The spokesperson reiterated, however, that the Mercedes models included in the recall were not fitted with the ‘higher risk’ Alpha airbags but rather the ‘Beta’ units.

“Mercedes-Benz vehicles were fitted with ‘Beta’ airbags, and the recall notice permitted owners to continue driving their vehicles until the repair was undertaken,” they said.

“To date, the affected airbags have been replaced in more than in 99.5 percent of the Mercedes-Benz vehicles involved in the recall in Australia.

“However, there is a small number of owners who have not brought their vehicles in for a complimentary airbag replacement.

“We are continuing to contact the owners of the outstanding vehicles to book airbag replacements as soon as possible.”

In addition to the $12.5 million fine, Mercedes-Benz Australia/Pacific was also ordered to pay $100,000 towards the ACCC’s court costs and provide a court-enforceable undertaking to establish the aforementioned product safety compliance program.