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Mercedes-Benz Australia fined for downplaying risk of faulty airbags!

In an Australian first for product safety law compliance, the Federal Court has fined Mercedes-Benz Australia/Pacific Pty Ltd (Mercedes-Benz) a hefty $12.5 million for not using attention-grabbing language when communicating with customers over the mandatory recall of potentially lethal Takata airbags.

Under the mandatory recall, suppliers had to recall and replace defective Takata airbags by 31 December 2020 and develop and implement a plan to communicate with consumers to optimise that replacement. Mercedes-Benz breached the Australian Consumer Law (ACL) by failing to implement that plan as required.

In calls with a number of customers, Mercedes-Benz staff described the recall as a ‘precaution’ and suggested- falsely- that the airbag type used by Mercedes had not caused injuries or deaths when installed in other manufacturers’ cars. 

According to the ACCC, such language created an impression that the airbag replacement was less urgent than was justified by the risks linked to the faulty airbags. 

Mercedes-Benz has also undertaken to the Court to run a compliance program on product safety obligations, including in relation to mandatory recalls.

This decision could be a warning to marketing departments, about crafting a “creative” narrative to soften the impact of mandatory ACL product safety notices!