Australia fines Mercedes Benz unit $8.5 million for lack of urgency on airbag recall

(Reuters) -The Federal Court of Australia has ordered Mercedes Benz Group's local unit to pay an A$12.5 million ($8.49 million) fine for failing to communicate to customers the urgency in recalling its "potentially deadly" airbags, the country's competition regulator said on Friday.

The Australian Competition & Consumer Commission (ACCC) said in a statement the German automaker admitted it had breached the country's consumer law by failing to clearly communicate with customers the urgency of the recall, as required by the Takata Recall Notice of the country's hihgway traffic safety body.

"We believe the statements made by Mercedes-Benz staff had the potential to give the impression to consumers that the airbag replacement was less urgent than was warranted by the real risks posed by the faulty airbags," ACCC Deputy Chair Delia Rickard said.

In conversations with 27 consumers, Mercedes-Benz staff described the recall as a "precaution", or implied that the type of airbags used in Mercedes vehicles had not caused any accidents, injuries or accidents, when that was not accurate, the ACCC said.

The regulator calls the airbags - manufactured by Japanese automotive parts maker Takata Corp - as "a potentially deadly issue".

"It was vital for the safety of Australian drivers and passengers that manufacturers took the risks seriously, and clearly communicated the risks to consumers."

Mercedes did not immediately respond to a Reuters request for comment.

($1 = 1.4717 Australian dollars)

(Reporting by Sameer Manekar in Bengaluru; editing by Uttaresh.V and Rashmi Aich)