Qantas should be fined ‘hundreds of millions’ if guilty to send message to companies, ACCC says

The consumer watchdog wants to see Qantas hit with hundreds of millions of dollars of penalties if its legal action alleging the airline was selling tickets already cancelled flights succeeds.

Gina Cass-Gottlieb, chair of the Australian Competition and Consumer Commission, on Friday said she wanted the Qantas case to deliver a new record penalty for consumer law breaches to scare other companies who had stopped fearing such fines.

Speaking on ABC Radio National, Cass-Gottlieb noted the current record penalty for a breach of Australia’s consumer law was $125m – issued to Volkswagen in 2019 for deceiving customers over diesel emissions – and said she was hopeful that, if found in breach of the law, Qantas should face a fine significantly higher.

Host Patricia Karvelas asked Cass-Gottlieb: “Are you talking over $300 million?”

Cass-Gottlieb replied: “We would want to get to more than twice that figure.”

The ACCC has been approached to clarify whether Cass-Gottlieb meant more than $600m – double the figure Karvelas suggested – or more than $250m, which is twice the current record penalty.

The watchdog alleges Qantas engaged in false, misleading or deceptive conduct in advertising and selling tickets for more than 8,000 flights between May and July 2022 that the airline had already cancelled in its system.

Qantas is accused of continuing to advertise and sell 8,000 tickets on its website for an average of two weeks, and in some cases up to 47 days, after cancelling the flights.

The ACCC began investigating Qantas cancellations after being inundated with complaints. Qantas was the most complained about company in the past two financial years, the ACCC said, and that 50% of those complaints last year – about 1,300 instances – were related to cancelled flights.

For each breach, Qantas faces maximum penalties of either $10m, three times the total benefits obtained from the behaviour, or 10% of the corporation’s annual turnover – whichever is the greater amount.

Qantas said it “takes these allegations by the ACCC seriously”, but noted the period examined “was a time of unprecedented upheaval for the entire airline industry”.

Australian Competition and Consumer Commission chair Gina Cass-Gottlieb in Sydney. Photograph: Blake Sharp-Wiggins/The Guardian

On Friday Cass-Gottlieb said she wanted the case to send a message to companies.

“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,” she said.

She said “we consider these penalties have been too low” and that they “should be in the hundreds of millions, not the tens of millions” for failing to keep consumers accurately informed so they know what “they’re paying and what they’re getting”.

“So this will be an important case for us in that regard.”

Cass-Gottlieb said that as well as being significant for the ACCC, it was “also a process for the court to feel comfortable to move to higher levels in respect of breaches of the 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.”