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
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: Suggested Citation