Mercedes-Benz Australia/Pacific Pty Ltd

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Mercedes-Benz Australia/Pacific Pty Ltd (Mercedes-Benz) in relation to conduct that was likely to contravene section 127 of the ACL.

Mercedes-Benz is the importer and wholesaler for a range of Mercedes-Benz branded passenger cars.

The Consumer Goods (Motor Vehicles with Affected Takata Airbag Inflators and Specified Spare Parts) Recall Notice 2018 (Recall Notice) requires suppliers of vehicles to initiate the recall of a vehicle with an Affected Takata Airbag Inflator (ATAI) that is not an Alpha Inflator, in accordance with the requirements of the Recall Notice and the Recall Initiation Schedule (RIS) submitted by the supplier and approved by the ACCC.

Under the Recall Notice, “initiate recall action” for the recall of vehicles, means to take steps to contact consumers directly (or as otherwise approved by the ACCC under a Communication and Engagement Plan (CEP)) to commence replacement of ATAIs.

Mercedes-Benz failed to initiate the recall of all affected C Class and E class vehicles in accordance with the dates in its approved RIS. Section 127 of the ACL provides that if a recall notice is in force in relation to consumer goods, it must be complied with.

The ACCC is particularly concerned about those vehicles that are over 6 years of age, are registered in areas of high heat or humidity and/or are fitted with driver side airbags. The ACCC’s view is that consumers may be exposed to serious safety hazards.

It is alleged that the conduct was aggravated by incorrect recall initiation dates being displayed on Mercedes-Benz’s Recall Database in respect of certain vehicles.

To address the ACCC’s concerns, Mercedes-Benz:

• provided information to the ACCC regarding the steps to obtain replacement inflators and increase repair facilities, steps to notify consumers and steps to address the risk associated with vehicle use until the ATAI has been replaced.
• submitted applications to vary its RIS and CEP.
• provided the ACCC with a section 87B undertaking.

The section 87B undertaking provides that:  

• Mercedes-Benz will offer a loan vehicle or alternative transport in certain circumstances.

• Mercedes-Benz will provide early ACCC notification where it becomes aware that it has failed to (or is likely to fail to) initiate recall in accordance with its approved RIS including details of the circumstances and steps to mitigate risks for consumers. 
• the Mercedes-Benz Recall Database will, to the extent reasonably possible, reflect the recall status of all affected vehicles.
• Mercedes-Benz will track and keep records of consumer complaints to Mercedes-Benz and its authorised dealers and the management of those complaints and provide reports to the ACCC as required under the Recall Notice
• Mercedes-Benz will communicate directly with affected consumers by letter, where consumer contact details are available, attaching the statement approved as part of the undertaking.