ACCC action re cancelled Qantas flights

[justinbrett]

Is the $100m fine the largest ACCC fine
Are there any larger fines?

BlueScope many years got a $60M fine for price fixing IIRC -but that went all the way to the Federal court. Can't remember when. Likely that remains the largest (accounting for inflation)

Heaps. Google search showed Phoenix Institute for nearly half a billion.

Record penalties of $438m ordered against Phoenix Institute and CTI for acting unconscionably and misleading students

The Federal Court has today imposed record penalties of $438m against former vocational college Phoenix Institute of Australia Pty Ltd (Phoenix) and its marketing arm Community Training Initiatives Pty Ltd (CTI) in proceedings brought by the ACCC and the Commonwealth.

www.accc.gov.au

 

[Quickstatus]

Phoenix Institute for nearly half a billion.

Ok thanks. How much did ACCC claw back given that Phoenix went into administration after commencement of proceedings

 

[RooFlyer]

As always the truth is somewhere in the middle and that has been reflected in the settlement.

Thomas’ ( and your?) contention that the ACC action would fail / did “fail”. It did not. It would’ve ’failed’ if it went to the court and the court exonerated Qantas. That didn’t happen.

How did they do on this one?

ACCC may well have known they were always going to lose the case - the case in itself achieves their aims for the reason you mention.

But they'll end up paying QF's legal bills for it.

This is interesting - we've seen similar things in the US where companies agree to settle or otherwise proceed with compensation without explicitly admitting wrongdoing.

Here, Qantas has admitted wrong-doing. Reporting in the Oz

 

[Saab34]

I feel like the ACCC was asleep at the wheel last decade when it came to Aviation. Seems to be much more happening now. Alliance deal blocked. Ghost flights case.

 

[muppet]

I feel like the ACCC was asleep at the wheel last decade when it came to Aviation. Seems to be much more happening now. Alliance deal blocked. Ghost flights case.

Yep, clearly under new management.

 

[encryptededdy]

I understand the need to compensate customers for this, but I feel it's a bit strange that hypothetically...

• Someone who booked a domestic MEL/SYD flight that was already cancelled but rebooked on a new flight 1-2hrs later gets $225
• Someone who booked an already cancelled but less frequent flight and had to be rebooked a day later still gets the same $225
• Another customer who booked the same cancelled flight, but booked before it was cancelled, gets nothing

Of course I suppose this is more reason to have a proper compensation / passenger rights legislation, but I wonder if for this ruling the compensation should depend on the amount of disruption caused to the customer as opposed to whether it was a domestic or international flight.

Also regarding the admission that these ghost flights had been going on for 2 years... it's a lot less likely now that it was just poor IT that nobody bothered to fix.

 

[justinbrett]

Thomas’ ( and your?) contention that the ACC action would fail / did “fail”. It did not. It would’ve ’failed’ if it went to the court and the court exonerated Qantas. That didn’t happen.

How did they do on this one?






Here, Qantas has admitted wrong-doing. Reporting in the Oz

View attachment 383661

You’re very binary on this one.

ACCC went in to this wanting the highest penalty ever awarded based on QFs deliberate actions to mislead (my paraphrasing). They have failed to prosecute this case, neither getting anywhere near the penalty they wanted nor getting QF to admit to the full extent of the allegations.

QF said all along this occurred due to Covid disruptions, and has maintained this defence in their media statement.

Initial media articles aren’t very favourable of the ACCC:

https://www.dailytelegraph.com.au/subscribe/news/1/?sourceCode=DTWEB_MRE170_a_GGL&dest=https%3A%2F%2Fwww.dailytelegraph.com.au%2Fnews%2Fopinion%2Fby-fining-qantas-120m-the-consumer-watchdog-proves-it-is-all-bark-and-no-bite%2Fnews-story%2Fcac09aacdeb7c3556047a521d1d5fa02&memtype=anonymous&mode=premium&v21=GROUPA-Segment-2-NOSCORE#

 

[MEL_Traveller]

Thomas’ ( and your?) contention that the ACC action would fail / did “fail”. It did not. It would’ve ’failed’ if it went to the court and the court exonerated Qantas. That didn’t happen.

How did they do on this one?






Here, Qantas has admitted wrong-doing. Reporting in the Oz

I think this is a win for the ACCC. They may have gone in posturing for the highest ever penalty, or whatever. But that’s posturing. Many law firms with class actions or whatever always give the upper limit. So does most law enforcement… ‘fines up to $xx_ can apply’, etc. It shows the gravity of the situation.

Lengthy court case, or a fast resolution and the ACCC can now focus on other important consumer issues? I’ll take the latter. And a huge saving to the taxpayer in legal fees and court time.

At the end of the day this was a breach. But the impact was low. Most pax accommodated within a few hours. For whoever made the decision - $100 million is a big price hanging over your career.

 

[RooFlyer]

I think this is a win for the ACCC. They may have gone in posturing for the highest ever penalty, or whatever. But that’s posturing. Many law firms with class actions or whatever always give the upper limit. So does most law enforcement… ‘fines up to $xx_ can apply’, etc. It shows the gravity of the situation.

Of course. In a general court case (not related to this) if a defendant plea bargains guilty in order to get a reduced sentence, they are still found guilty and the prosecution has "succeeded." [Edited]

Mr Thomas' amusing spin today, including 3 paras of the CEO's statement but no quotes from the ACCC statement

https://www.airlineratings.com/news/passenger-news/qantas-reaches-agreement-with-accc-over-flight-cancellations/

So lets help Mr Thomas

Qantas (ASX: QAN) has admitted that it misled consumers by advertising tickets for tens of thousands of flights it had already decided to cancel, and by cancelling thousands more flights without promptly telling ticketholders of its decision, after court action by the ACCC.

 

[RSVKanga]

Of course. In a general court case (not related to this) if a defendant offers to plead guilty in order to get a reduced sentence, they are still found guilty and the prosecution has "succeeded."

Mr Thomas' amusing spin today, including 3 paras of the CEO's statement but no quotes from the ACCC statement

https://www.airlineratings.com/news/passenger-news/qantas-reaches-agreement-with-accc-over-flight-cancellations/

So lets help Mr Thomas

Geoffrey Thomas is a well-respected journalist and commentator on Australian aviation.

I think it’s also time for you to respect the fact that the ACCC also misled the Australian public when they stated that QF “charged fees for no service” and failed to provide evidence, and failed to achieve their full motive, why is why their penalty is only $100 million, a far cry from the $600 million floated by the ACCC when they were excited about this last September.

 

[RooFlyer]

Qantas customer remediation web site, by Deloittes ("remediation" not "compensation" )

Home - Qantas Customer Remediation Program

www.secure-portal.com.au

ACCC went in to this wanting the highest penalty ever awarded based on QFs deliberate actions to mislead (my paraphrasing). They have failed to prosecute this case, neither getting anywhere near the penalty they wanted nor getting QF to admit to the full extent of the allegations

Try an analogy i gave above

In a general court case (not related to this) if a defendant plea bargains guilty in order to get a reduced sentence, they are still found guilty and the prosecution has "succeeded."

You and Thomas as tried to run the line that the ACCC "failed". That's the quote; that's risible. But if you think that $100 million fine and $20 mill in compo, plus all the other stuff is some sort of win for Qantas, and a loss for the ACCC, then go for it.

Initial media articles aren’t very favourable of the ACCC:

I'm sure the shareholders will be comforted by that as they kiss $120 million goodbye.

 

[kangarooflyer88]

I’m surprised ACCC settled for so little considering they were crowing about getting a much higher amount earlier.

I’m guessing there were flaws on both sides.

Justice delayed is justice denied.

We can put someone in jail, which effectively shuts their life down, if temporarily, but it does have a marked effect in most cases.

At what point does a company not deserve another chance at all to do the right thing?

Well, how about these punishments:

• Qantas forced to liquidate and shut down - probably the most desirable choice for any opposition airline
• Qantas forced to suspend all operations for a fixed amount of time (e.g. 3 months) - the cost of managing the suspension is borne by the company
• New sales (new income) by Qantas are suspended for a fixed amount of time, or are seized completely
• Qantas income garnished by some certain amount for a fixed amount of time (e.g. 50% for 2 years)
• The entire Qantas board is imprisoned
• The entire Qantas board is forced to resign - all severance clauses resulting in monetary gain during exit from the company are null and void
• The Qantas share price is forced to be set to zero for a fixed amount of time
• Qantas route rights are suspended in accordance to where they sold ghost flights. For example, if there were 500 ghost SYD-MEL flights sold, the airline is forced to stop operating 500 SYD-MEL flights within some certain time period

There are a limited range of reasonable punishments here. I mean if they were to force Qantas to shut down or cease operations, what message would that send to stock markets? Now you have zero certainty in the stocks you hold as any tyrannical government can impose its will on the company. And remember too, most people who own stocks aren't institutional investors, they are pensioners and those saving up for retirement in their Super. In the end sending a message to a large company like Qantas only hurts the vulnerable the government are supposed to be protecting.

So they will just add another $100 to the airfares....

That remains to be seen. I will point out that sometimes businesses just eat the cost. We certainly see that in the UK with the air passenger duty which has had the effect of the airlines eating up the additional costs. (For those who don't believe me on that, compare flights from Paris to LA and London Heathrow to LA paying close attention to the base fare and carrier surcharge. You'll see that the UK does have the air passenger duty tacked on but the base fare and carrier surcharge decrease by a proportional amount meaning flights from Paris or London are about the same).

-RooFlyer88

 

[RooFlyer]

I mean if they were to force Qantas to shut down or cease operations, what message would that send to stock markets?

Hey, you listed companies - don't mislead consumers. Its against the law and the potential pain ain't worth you even trying.

tyrannical government can impose its will on the company

It wasn't the government.

And remember too, most people who own stocks aren't institutional investors, they are pensioners and those saving up for retirement in their Super.

Those saving for retirement in their super would be "most people" (anyone who has a job, or has had a job in the past 20 or so years). Ergo, most people "own stocks".

I will point out that sometimes businesses just eat the cost.

Yes, but Qantas isn't known to be one of them.

 

[justinbrett]

Qantas customer remediation web site, by Deloittes ("remediation" not "compensation" )

Home - Qantas Customer Remediation Program

www.secure-portal.com.au

Try an analogy i gave above

In a general court case (not related to this) if a defendant plea bargains guilty in order to get a reduced sentence, they are still found guilty and the prosecution has "succeeded."

You and Thomas as tried to run the line that the ACCC "failed". That's the quote; that's risible. But if you think that $100 million fine and $20 mill in compo, plus all the other stuff is some sort of win for Qantas, and a loss for the ACCC, then go for it.

It wasn't a criminal case, and QF didn't make a plea deal. But I guess if you squint... no. Not an apt analogy at all. You're hung up on who won and who lost, I've never commented about either. The fact ACCC failed in their prosecution of the case is objective fact, even if that was by their own election.

QF was going to lose the PR war regardless, it's in their interest to settle and get this out of the media. SMH made a suggestion QF realised it would have to air the inner workings of the business and they didn't wish to do so. Other articles I've read imply it was the ACCC that initiated the settlement. We'll never know.

Civil cases settle all the time, it doesn't imply liability beyond the terms of the settlement agreement. QF comes out of this saying the events that happened were not intentional and as a result of process failures from the covid re-start. ACCC insinuation that QF was deliberately selling seats on ghost flights has failed.

QF seems pretty happy with the outcome. The tone of their press release doesn't seem very remorseful to me.

 

[RooFlyer]

QF seems pretty happy with the outcome. The tone of their press release doesn't seem very remorseful to me.

Given that they admitted wrongdoing, this would be in line pretty much of what we'd expect from Qantas.

But never mind all that. I want to hear from Joe Aston and Kanga! I bet Joe would be happy that the parties settled - he can wrap up another chapter.

 

[justinbrett]

Given that they admitted wrongdoing, this would be in line pretty much of what we'd expect from Qantas.

According to the ACCC, QF admits that "misleading representations were made to consumers in respect of flights it had decided to cancel"

As consumer law doesn't require intent for a customer to be misled, this is entirely consistent with QF's statement of post covid process failures, and a very far cry from the insinuations made by the ACCC in the initial allegations.

In the words of ACCC chair herself, last year (which will come back to haunt her):
“If a corporate giant is told to pay $100 million, it is seen as the cost of doing business,” she said.

”We would hope hundreds of millions of dollars would be enough to act as a deterrent to not only Qantas but others if these allegations are satisfied in court.”

I guess if both sides are happy that means it was a good compromise?

 

[RooFlyer]

Not an apt analogy at all.

Oh, I don't think it was a bad analogy. From the Oz on-line

Australian Competition and Consumer Commission chair Gina Cass-Gottlieb revealed Qantas made the admission on the way to striking a $120m settlement deal in the ghost flights fiasco.

Ms Cass-Gottlieb who had been seeking a penalty in excess of $250m, said the settlement reached was effectively a “discount” for Qantas’ cooperation and admission of guilt.

“We do have agreement from Qantas that they admit contravention in terms of making false and misleading representations to customers,” she said.

“We are satisfied that with the factual admissions Qantas has agreed to in relation to the conduct that surrounded and the awareness of a number of senior managers that their systems were not able to give those prompt notifications to consumers, that there are multiple contraventions and misrepresentations to a large number of customers.”

Sounds analogous to a plea-bargain to me.

#Black knight "its just a flesh wound"

 

[RichardMEL]

Perhaps Dennis Denito can take QF to the high court:

"In summing up, it's the constitution, it's The Montreal Convention, it's justice, it's law, it's the vibe and aah no that's it, it's the vibe. I rest my case."

 

[oz_mark]

The undertaking is here: Qantas Airways Limited (Qantas)

 

[justinbrett]

Oh, I don't think it was a bad analogy. From the Oz on-line



Sounds analogous to a plea-bargain to me.

There’s a fundamental difference in that a plea deal finds the defendant guilty, a settlement is the abandonment of the case under mutually agreed terms. QF didn’t admit anything it hadn’t already last year, today as it did last year it used post Covid process failures as a defence.

If any position was changed it was the ACCC:
The ACCC is no longer proceeding with its claims against Qantas about wrongful acceptance of payment, including any allegation that Qantas received payment for a service it did not, and had no intention of, providing.

But whatever makes you happy.