ACCC Chair says consumer watchdog to sue Qantas for at least ‘more than twice’ previous maximum penalty of $125 million

The Australian Competition and Consumer Commission (ACCC) will look to seek at least a $250 million payout from Qantas if their federal court action against the national carrier is successful.

On Thursday, the consumer watchdog sued Qantas for allegedly engaging in deceptive conduct over reportedly advertising more than 8,000 flights online after they had already been cancelled.

The claims relate to a two-month period in 2022 between May and July where the airline cancelled about 15,000 domestic and international services and failed to notify ticketholders until weeks later, but continued selling tickets on their website.

ACCC Chair Gina Cass-Gottlieb said a “record penalty” would be sought against Qantas to send a solid warning against breaches of consumer law, noting that companies were no longer “scared” of percussions.

“We are going to seek a penalty that will underline that this is not just to be the cost of doing business, it is to deter conduct of this nature,” she told ABC Radio National on Friday.

“The highest penalty to date against a breach of the Australian consumer law was $125 million against Volkswagen and we consider that this should be a record penalty for this conduct.

“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.”

While Ms Cass-Gottlieb did not specify the penalty amount, she said it would ideally be at least double the previous maximum of $125 million.

“We would want to get to more than twice that figure, yes,” she said.

“This is a process for the ACCC, it’s also a process for the court to feel comfortable to move to higher levels in respect of breaches of the consumer law.

“We consider its important enough that we need to set really high standards of performance in engaging with every ordinary Australian consumer.”

Ms Cass-Gottlieb said in the last two years, Qantas has been the most complained about company to the consumer watchdog.

In 2022, the ACCC received 1,300 complaints about the cancellations alone, which was only about half of the total tally against Qantas.

“It was actually the trigger for this investigation,” Ms Cass-Gottlieb said.

The ACCC chair reiterated the severity of Qantas’ consumer law breaches lay not in the cancellations themselves, but in their decision to keep advertising and selling flights afterwards which impacted “tens of thousands of people”.

Qantas responded to the ACCC lawsuit filing by issuing a statement asserting it was taking the allegations “seriously”. 

“We have a longstanding approach to managing cancellations for flights, with a focus on providing customers with rebooking options or refunds. It’s a process that is consistent with common practice at many other airlines,” the airline said in a statement.

“It’s important to note that the period examined by the ACCC between May and July 2022 was a time of unprecedented upheaval for the entire airline industry. All airlines were experiencing well-publicised issues from a very challenging restart, with ongoing border uncertainty, industry wide staff shortages and fleet availability causing a lot of disruption.

“We will examine the details of the ACCC’s allegations and respond to them in full in court.”

Following the court action announcement, the national carrier sensationally backflipped on its COVID-era travel credit policy by moving to scrap the expiry date for $570m of unused vouchers.

Qantas is set to be face the Federal Court of Australia for proceedings.