Australian Competition and Consumer Commission She filed a lawsuit in federal courtIt accused Qantas of “false misleading or deceptive conduct”.
The consumer watchdog alleges that Qantas engaged in such behavior when it announced tickets for flights it had already cancelled.
The national carrier entered damage control, claiming that it takes the allegations “very seriously” and canceled the expiration dates of $570 million in airline credits that were due to expire at the end of the year.
The allegations of ticket sales for canceled flights relate to those scheduled between May and 2022.
The ACCC asserts that for more than 10,000 flights scheduled to depart in that period, the carrier failed to notify existing ticket holders of the cancellation for an average of 18 days, and in some cases for as long as 48 days.
The regulator also accused the airline of failing to update the “Manage my booking” web page with cancellation notices.
Qantas has responded publicly by claiming that She will take them “very seriously,” and she will respond to them in court.
It’s another PR disaster for the airline that has gotten more than its fair share of bad publicity after it reported a pre-tax profit of $2.47 billion at the end of June 2023 – the largest ever in the airline’s history, and quite an achievement considering it was reeling from Huge losses during the covid pandemic when global travel was shut down.
But despite this, there remains a great deal of resentment towards Qantas, much of it stemming from its refusal, despite plentiful profits, to pay back the JobKeeper subsidies it received during the pandemic.
Most hated airline in Australia?
Qantas was once the official national carrier of Australia, and although the government no longer has any financial stake in Qantas, it is still considered our flagship airline, and Its activities are attracting a high degree of interest across the country.
Sure enough, in recent years, the sparkle has faded from its reputation as consumers have lined up to complain about how slow the refund process is, or how difficult it is to use travel vouchers, and the frustration of long call-center waits and order cancellations. Flights, lost baggage, the complexity and inconvenience of using the frequent flyer program, just to name a few.
Qantas has come under significant media scrutiny And also through a Senate investigation in recent weeks of Chief Executive Officer Alan Joyce, whose term at the helm ends in November. He has been widely criticized for “talking in riddles” and “not answering questions” on matters such as accusations of price gouging, Anti-competitive behaviourAnd skyrocketing airfares, covid travel credits, and hoarding slots.
However, of all the accusations leveled at Qantas in the past two weeks, the Australian Competition and Climate Commission’s allegations of “false misleading or deceptive conduct” are the most serious. If found guilty, the airline could face significant penalties.
Misleading or deceptive behavior
Many of the laws relating to business activity such as the buying and selling of goods and services are governed by Australian Consumer Law, which is set out in the Australian Consumer Law Schedule 2 of the Competition and Consumer Act 2010It is the successor to the Trade Practices Act of 1974 (TPA).
Article 18 of Schedule 2 Explains that:
(1) No person shall, in a trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
- The behavior must occur in the context of a “trade or trade”; And
- The conduct must be misleading, deceptive, or likely to mislead or deceive.
Trade or trade means “commercial transactions” and applies to any person who supplies or purchases goods or services. This is a very broad definition, however, and it is important to note that “false, misleading or deceptive conduct” can apply even if there is no intent behind the behavior and it is “true wrong”.
The court will also take into account the type and significance of any loss incurred as a result of this behaviour.
Some examples of misleading or deceptive behavior
Examples of misleading or deceptive behavior include:
- False advertisements about the company’s products or its competitors,
- Ads or special offers that misrepresent products or prices
- Withholding important information.
There are significant penalties for any company or organization found to be engaging in misleading or deceptive behaviour.
For example, In 2022, Samsung Electronics Australia Pty Ltd A federal court has ordered $14 million in penalties for misleading consumers about their cellphones’ water-resistant capabilities.
A series of ads showed the phone being used in pools or while surfing with the tagline: Do everything you love this summer on the Galaxy A5. Whether you’re listening to your favorite song by the pool or catching a Sunday surfing session at the beach.
In fact, pool water and sea water can damage phones by corroding charging ports. Samsung admitted the ads were misleading and paid the fine.
While the main purpose of the ACCC is to ‘monitor’ consumer law in Australia – it has the power to investigate and enforce compliance, or take legal action, it does not act on behalf of individual consumers.
Consumers may file a complaint with the ACCC, and have their complaints investigated. If they choose to take legal action against a company they believe has engaged in misleading or deceptive behaviour, they are entitled to claim damages under Section 236 of the Australian Consumer Code.