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

56 Pages Posted: 21 Jan 2009 Last revised: 13 Aug 2014

See all articles by Christine Parker

Christine Parker

Melbourne Law School, University of Melbourne

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science

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 noncompliance. In this article, the authors use evidence from a survey of 999 large Australian businesses and these businesses' experiences of compliance and enforcement under the Trade Practices Act 1974 (Cth) ('TPA') to examine how large Australian businesses perceive the costs and gains of compliance and noncompliance with the Act. First, the authors look at how serious these businesses perceive the threat of financial penalties, criminal convictions, and economic and social losses to be in the event of noncompliance, as well as whether they see benefits such as organisational learning as gains of compliance. Secondly, the authors examine whether enforcement action of the Australian Competition and Consumer Commission ('ACCC') or stakeholder criticism changes the way that these businesses calculate the costs and gains of compliance and noncompliance. The authors end by drawing some policy conclusions for the TPA and the ACCC.

Keywords: Australian Businesses, compliance, noncompliance, ACCC, enforcement action, TPA

JEL Classification: K00, K2, K20, K29

Suggested Citation

Parker, Christine and Nielsen, Vibeke Lehmann, How Much Does it Hurt? How Australian Businesses Think About the Cost and Gains of Compliance and Noncompliance with the Trade Practices Act. Melbourne Univeristy Law Review, Vol. 32, No. 2, 2008. Available at SSRN: https://ssrn.com/abstract=1330670

Christine Parker (Contact Author)

Melbourne Law School, University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

HOME PAGE: http://law.unimelb.edu.au/about/staff/christine-parker

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science ( email )

Bartholins Allé è
DK-8000 Aarhus, 8000
Denmark

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