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Highlights:
- The Federal court of Australia has ordered the German automaker to pay AU$12.5 million fine.
- Mercedes-Benz has failed to comply with the recall of Takata airbag, announced by the federal court.
- Takata airbag has been associated with many deaths and serious injuries globally.
Mercedes-Benz Australia has been slammed with a fine of AU$12.5 million by the Federal Court of Australia.
Why is Mercedes-Benz Australia penalised?
The Federal court has imposed a fine on Mercedes-Benz as it lacked the urgency to communicate with some customers regarding the recall of deadly Takata airbags.
Australia’s competition regulator, the Australian Competition & Consumer Commission (ACCC) said that the automaker failed to use “attention-capturing, high-impact language” on 27 occasions about the mandatory recall of the Takata airbags. Reportedly, a total of 50,000 calls were made by the company.
As per the ACCC release, the wholesaler and importer of passenger cars have admitted that it had not followed the law issued by the federal government in 2018.
Reportedly, the company has been ordered to pay the fine in 30 days (starting from 1 September 2022).
What is the Takata airbags issue?
Since 2014, the Takata airbags defect has been a serious concern across many brands globally. It was crucial to ensure the safety of Australian passengers and drivers. This risk was taken very seriously by the automaker manufacturers, and the risks were communicated clearly to the consumers.
The ACCC informed that defect in Takata airbags is associated with over 350 injuries and 33 deaths globally. In Australia, it led to one death and serious injury to another.
The Takata airbags recall was one of the largest compulsory recalls in Australia’s history. The recall affected over 4 million Takata airbags in around 3 million vehicles.
As per the ACCC release, it is the first time that Mercedes-Benz has been hit with a fine for not complying with the compulsory recall notice.
Image source: © Olgaru79 | Megapixl.com
What else does Mercedes-Benz has to do?
In addition to the fine of AU$12.5 million to the federal court, the company also has to pay AU$100,000 to the ACCC’s costs.
Also, to address the ACCC’s concern about compliance, the company has provided an undertaking to ACCC that would implement compliance steps to meet the recall obligations. The steps are:
Communicating the federal court proceeding’s outcome among the relevant staff and executives.
On an annual basis, the company would communicate with the relevant executives and staff regarding the importance of compliance with product safety obligations, focusing on mandatory and voluntary recalls in the country.
The company need to ensure that all staff and executive are briefed about the requirements and content of compulsory recall. Also, call centre materials needs to be approved and reviewed by senior Mercedes-Benz corporate counsel.
