In a bid to send a strong message to corporations, the Australian Competition and Consumer Commission (ACCC) is seeking to impose “hundreds of millions” of dollars in penalties on Qantas if the airline is found guilty of selling tickets for flights it had already canceled. The consumer watchdog is aiming for record penalty to deter future breaches.
“The ACCC is on a path of wanting to substantially increase the penalties that large corporations, in relation to serious conduct, pay for failing consumers. And so this is going to be an important test for us,” said Gina Cass-Gottlieb, the chair of the ACCC, expressing her intent to establish a new record for consumer law breaches.
Cass-Gottlieb stressed the importance of the case as a means to significantly increase penalties for large corporations involved in serious conduct that harms consumers. “We consider these penalties have been too low. (The penalties) should be in the hundreds of millions, not the tens of millions”, she said. Defending the need for consumers to be accurately informed and that “they’re paying and what they’re getting”.
The current record penalty stands at $125 million, which was imposed on Volkswagen in 2019 for misleading customers about diesel emissions. “We would want to get to more than twice that figure”, Cass-Gottlieb stated, meaning ACCC aims to go over $250 million, which would be twice the current record penalty.
The ACCC’s case against Qantas alleges false, misleading, and deceptive conduct related to the sale and advertising of tickets for over 8,000 flights that the airline had already canceled between May and July 2022. The watchdog claims that Qantas continued to promote and sell these tickets on its website for about two weeks after the flights had been canceled, but at times going up to 47 days.
Over the past two financial years, Qantas was the most complained-about company, with approximately 1,300 complaints (50% of total complaints) pertaining to canceled flights in the last year, sparking an investigation from the ACCCC. Based on whichever value is higher, Qantas could potentially face maximum penalties of either $10 million for each violation, three times the total benefits obtained from the behavior, or 10% of the corporation’s annual revenue.
The ACCC’s pursuit of a substantial penalty for Qantas aims not only to protect consumers but also to establish higher standards of performance for corporations under consumer law. “We consider it’s important enough that we need to set really high standards of performance in engaging with every ordinary Australian consumer”, Cass-Gottlieb stated.
The outcome of this case could have far-reaching implications for corporate accountability and consumer protection in Australia, setting a precedent for the penalties faced by companies found in breach of consumer law.