The regulator suing Qantas Airways Ltd. for allegedly selling seats on thousands of cancelled flights is seeking a record penalty of more than A$250 million ($162 million), making the lawsuit a test case for the watchdog’s hardened stance against breaches of consumer law.

Fines for failing customers in Australia should stretch to several hundred million dollars, rather than tens of millions, Gina Cass-Gottlieb, chair of the Australian Competition & Consumer Commission, said in a radio interview with the Australian Broadcasting Corp. on Friday.

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Qantas Pursued for Record $162 Million Fine for Alleged Bogus Seat Sales