ACCC alleges Mercedes-Benz minimised risk of defective Takata airbags during compulsory recall

The ACCC has instituted Federal Court proceedings against Mercedes-Benz Australia/Pacific Pty Ltd (Mercedes-Benz) for allegedly failing to comply with their obligations under a compulsory recall of defective, and potentially deadly, Takata airbags.

The 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.

It is alleged that on at least 73 occasions, Mercedes-Benz call centre staff made representations to consumers by phone or email to the effect that they were undertaking the recall as a precaution; that it was still okay (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. 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.

“The Takata airbag compulsory recall was commenced in Australia because of the risk of misdeployment of defective Takata airbags in millions of vehicles, which could result in serious injury or death to drivers and passengers, even in relatively minor accidents,” ACCC Deputy Chair Delia Rickard said.

“The Takata recall was the first motor vehicle compulsory recall required in Australia under the Australian Consumer Law, and was the biggest vehicle recall in Australian history, affecting over 4 million Takata airbags in around 3 million vehicles.”

“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.”

For example, consumers were told by Mercedes-Benz staff, “The reason we’re in this recall is more of a precautionary measure and an ease of mind for our customers.” or “You are still okay 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.” or “We’ve not actually had any problems with our airbags but we are recalling them for customer peace of mind anyway.”

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

Background:

Mercedes-Benz is an importer and wholesaler of passenger cars for the Australia/Pacific region and is owned by parent company Daimler AG, a multinational automotive company.

The ACCC is aware of reports of overseas misdeployments of Takata airbags in Mercedes vehicles.

The Consumer Goods (Motor Vehicles with Affected Takata Airbag Inflators and Specified Spare Parts) Recall Notice 2018 came into effect on 1 March 2018.

Under the Takata airbag recall, suppliers were required to recall and replace defective Takata airbags by 31 December 2020 and develop and implement a plan to communicate with consumers to maximise replacement of these airbags. As of July 2021, car manufacturers have successfully recalled 99.9 per cent of vehicles affected by these airbags.

Expert advice provided to the ACCC, which formed the basis for the compulsory recall, indicates that the risk of a defective Takata airbag rupturing may arise between 6 and 25 years after it is installed in a vehicle. In areas of high heat and humidity, the risk of rupture may arise between 6 and 9 years.

The Recall Notice applies to Affected Takata Airbag Inflators, commonly known as Alpha or Beta (also known as non-Alpha) airbags. Globally, ruptures of defective Takata airbags have been associated with approximately 33 deaths and over 350 injuries. In Australia there has been one death and one serious injury attributed to the misdeployment of airbags subject to the compulsory recall. Both of these incidents involved Beta airbags.

Consumers can visit Product Safety Australia or contact their manufacturer to check if their vehicle is affected by the compulsory recall.

The attached document below contains the ACCC’s initiating court document in relation to this matter. We will not be uploading further documents in the event this initial document is subsequently amended.

Concise statement

ACCC v Mercedes Benz Concise Statement (
PDF 463.18 KB )

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