The Federal Court of Australia has ordered Qantas Airways Limited (ACN 064 142 418) and the operator of its duty free program, Alpha Flight Services Pty Ltd (ACN 009 661 901), to pay penalties of $200,000 and $50,000 respectively, for contravening the product safety provisions of the Australian Consumer Law.
Consumer Affairs Victoria commenced proceedings after becoming aware that Qantas was offering to supply small, high-powered magnets that were subject to a permanent ban through its duty free program operated by Alpha Flight Services.
The magnets, known as 'Nano Magnetics Nanodots Onyx/Gold' were available for purchase on Qantas international flights and via the airline's 'In Sky Shopping' website between August and September 2013.
In handing down his judgement, Justice Tony Pagone noted that during the relevant period, neither company "had in place within their own organisations the necessary mechanisms to ensure that a product like the Nanodots, that is, that a product that was prohibited, would not come within their possession or control, would not be offered for sale, and would not be sold."
In addition to the penalties, Qantas and Alpha must publish public product safety notices on their respective websites; in the next available 'In Sky Shopping' catalogue; and in The Australian and Financial Review newspapers.
Both companies must provide refunds to consumers returning the Nanodots, pay a fixed sum of $60,000 in costs, and pay the costs associated with Consumer Affairs Victoria destroying and disposing of the goods.
For more information about the permanent ban on small high-powered magnets, view our Banned products and product recalls page.
The Director of Consumer Affairs Victoria has lodged an appeal against the orders made by Justice Pagone and the matter is listed for hearing before the Full Court of the Federal Court of Australia on 28 May 2015.
View the full court outcome on the Austlii website.
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