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OPINION PIECE FROM THE DAILY TELEGRAPH
By fining Qantas $120m, the consumer watchdog proves it is all bark and no bite
Why did the $120 million fine for Qantas fall short of the “record penalty” threatened by the consumer watchdog?
James Willis2 min read
May 6, 2024 - 12:28PM
In August 2023 Gina Cass-Gotlieb famously claimed that Qantas would be hit with a record penalty for selling ghost flight tickets
“We consider that this should be a record penalty.”
They were the bold words of ACCC chief Gina Cass-Gotlieb last year, when promising to throw the book at Qantas for their conduct.
“This is going to be an important test for us… penalties have been too low. We are pursuing this matter in court. We took it in a defined and strong way and we will continue to proceed,” she said.
Australians have every right to be scratching their heads and wondering what on earth happened. Having promised to fight Qantas to the death for selling tickets on flights that didn’t actually exist, the ACCC has done a deal and let them off the hook.
The Federal Court action is coming to an end, with Qantas to pay a proposed $100 million fine and another $20 million to customers.
Former Qantas CEO Alan Joyce was in charge of the airline during the “ghost flight” scandal.While the fine may seem hefty, it falls desperately short of what the ACCC was promising when this appalling behaviour first came to light.
In an interview about Qantas in August, Ms Cass-Gotlieb said: “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. We would want to get to more than twice that figure.”
She was threating a $250 million whack and that's before you include the compensation for dudded customers.
It was a promise that attracted many positive headlines for the ACCC, at a time when it felt like the entire country was piling on the Flying Kangaroo.
“We are going to seek a penalty that will underline that this is not just to be a cost of doing business. We consider (historic) penalties have been too low. This will be an important case in that regard” Ms Cass-Gotlieb said.
Australian Competition and Consumer Commission Chair Gina Cass-Gottleib claimed Qantas would be hit with a “record penalty.” Picture: Jane DempsterAfter initially denying the severity of the allegations - Qantas has now waved the white flag. They have admitted to misleading customers by selling tickets for flights it had already cancelled internally. Ghost flights. They also cancelled thousands of other flights without telling ticket holders of their decision.And this wasn’t for a single month. The airline concedes this happened between May 2021 and August 2023. 2 years and 3 months. Disgracefully, part of this occurred during the worst stages of the pandemic, when booking trips and holidays was a nightmare.
86,000 dudded customers will be compensated a total of $20 million and rightly so.
The ACCC says the conduct of Qantas was “egregious .
Wonderful - so then a basic point.
If the behaviour was worthy of a “record penalty”– as the consumer watchdog insisted it was – then a record penalty should have been issued.
Once again we have a case of the ACCC being all bark and no bite