Impose penalty on Qantas if sent message to firms

Suppose the consumer watchdog’s legal case against Qantas, in which it is alleged that the airline sold tickets for flights that had already been cancelled, is successful. In that case, the watchdog wants to see the airline penalized to the tune of hundreds of millions of dollars.

The chairwoman of the Australian Competition and Consumer Commission (ACCC), Gina Cass-Gottlieb, stated on Friday that she hoped the Qantas case would result in a new record penalty for violations of consumer law in order to terrify other businesses that had grown complacent about the possibility of receiving such fines.

Cass-Gottlieb stated that she was hopeful that, if found in violation of the law, Qantas should face a fine that was significantly higher than the current record penalty for a breach of Australia’s consumer law, which was $125 million and was issued to Volkswagen in 2019 for deceiving customers over diesel emissions. Cass-Gottlieb made these remarks while speaking on Radio National.

Cass-Gottlieb was questioned by the show’s host, Patricia Karvelas, who queried, “Are you talking over $300 million?”

The response provided by Cass-Gottlieb was, “We would want to get to more than twice that figure.”

After further investigation, the ACCC determined that Cass-Gottlieb had meant a figure more than $250 million, which is double the amount of the previous record penalty.

The watchdog organization asserts that Qantas engaged in conduct that was either false, misleading, or deceptive when it advertised and sold tickets for more than 8,000 trips between May and July 2022 that the airline had already cancelled in its system but continued to do so nevertheless.

It is alleged that Qantas continued to market and sell 8,000 tickets on its website for an average of two weeks, and in some cases for as long as 47 days, after cancelling the flights for which the tickets were purchased.

Following a flood of complaints, the Australian Competition and Consumer Commission (ACCC) initiated an investigation into Qantas’s cancellations. According to the ACCC, Qantas was the company that received the most customer complaints over the course of the previous two fiscal years, and almost 1,300 of those complaints related to Qantas having cancelled flights.

If Qantas is found to be in violation of the terms of the agreement, the company might be subject to fines of up to $10 million (which is equivalent to three times the sum of all advantages derived from the behaviour) or 10% of the company’s annual turnover, whichever is higher.

Although Qantas acknowledged that the time period under investigation “was a time of unprecedented upheaval for the entire airline industry,” the company stated that it “takes these allegations by the ACCC seriously.”

On Friday, Cass-Gottlieb expressed her desire for the case to serve as a warning to business organizations.

The Australian Competition & Consumer Commission (ACCC) is moving in the direction of wanting to significantly enhance the penalty that large firms pay in relation to serious conduct for failing customers. She went on to say that this was going to be a significant test for both of us.

She stated that “we consider these penalties have been too low” and that they “should be in hundreds of millions, not tens of millions” for failing to keep consumers accurately informed so that they know what “they’re paying and what they’re getting.” This was in reference to the fact that the company failed to make consumers aware of what “they’re paying and what they’re getting.”

“As a result, we anticipate that this will be a significant case for us in that regard.”

According to Cass-Gottlieb, this was “also a process for the court to feel comfortable to move to higher levels in respect of breaches of the consumer law,” which made it significant not only for the ACCC but also for the court itself.

“We believe it to be important enough that we need to set really high standards of performance in engaging with each and every ordinary consumer in Australia.”

 

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