How Much Does it Hurt? How Australian Businesses Think About the Costs and Gains of Compliance with the Trade Practices Act

Posted: 18 Jan 2008 Last revised: 13 Aug 2014

Christine Parker

Monash University - Faculty of Law

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science

Date Written: December 10, 2007

Abstract

Law-makers, courts and regulators all assume that businesses' compliance with the law is at least partly influenced by management's rational calculations about the costs and gains of compliance and non-compliance. In this paper we use evidence from a survey of 999 large Australian businesses' experience of compliance and enforcement under the Trade Practices Act (TPA) to examine how large Australian businesses perceive the costs and gains of compliance and non-compliance with the TPA. First, we look at how seriously they perceive the threat of financial penalties and criminal convictions as well as economic and social losses from a range of stakeholders in the event of non-compliance, and whether they see positive benefits such as organisational learning and better ways of handling customer complaints as gains of compliance. Second, we examine whether ACCC enforcement action or stakeholder criticism changes the way they calculate the costs and gains of compliance and non-compliance. We conclude by drawing some policy conclusions for the TPA and ACCC.

Keywords: deterrence, compliance, regualtory enforcement, competition law, consumer protection

JEL Classification: K42

Suggested Citation

Parker, Christine and Nielsen, Vibeke Lehmann, How Much Does it Hurt? How Australian Businesses Think About the Costs and Gains of Compliance with the Trade Practices Act (December 10, 2007). Available at SSRN: https://ssrn.com/abstract=1085054

Christine Parker (Contact Author)

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800
Australia

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science ( email )

Bartholins Allé è
DK-8000 Aarhus, 8000
Denmark

Paper statistics

Abstract Views
439