NCJ Number
50904
Date Published
1978
Length
67 pages
Annotation
THE COMPANIES PROSECUTED UNDER THE AUSTRALIAN TRADE PRACTICES ACT OF 1974 ARE INTERVIEWED TO DETERMINE WHAT CHANGES HAVE BEEN MADE BY EACH COMPANY TO PREVENT A RECURRENCE OF THE VIOLATION.
Abstract
THE AUSTRALIAN TRADE PRACTICES ACT OF 1974 PROHIBITS ANTICOMPETITIVE BUSINESS PRACTICES AND ACTIVITIES WHICH MISLEAD OR DECEIVE CONSUMERS. BY NOVEMBER 1977, 19 COMPANIES HAD BEEN SUCCESSFULLY PROSECUTED UNDER THE CONSUMER PROTECTION PROVISIONS OF THE TRADE PRACTICES ACT. THE RESEARCH CONCERNS THE IMPACT OF PROSECUTION ON THESE COMPANIES. IT IS NOTED THAT IN NEARLY EVERY CASE PROSECUTED, THE VIOLATION WAS ATTRIBUTABLE TO SOME ORGANIZATIONAL DEFECT. THE MAJOR PREMISE OF THE STUDY IS THAT WHERE A VIOLATION WAS DUE TO SOME ORGANIZATIONAL DEFECT, THE IMPACT OF SANCTIONS CAN BE DETERMINED BY WHETHER THE COMPANY SUBSEQUENTLY CORRECTED THIS DEFECT. INFORMATION WAS OBTAINED THROUGH INTERVIEWS WITH TOP PERSONNEL OF THE COMPANIES INVOLVED, WITH ALL BUT 3 OF THE COMPANIES PARTICIPATING. IT IS ACKNOWLEDGED THAT THE DATA OF THE STUDY ARE ONLY AS RELIABLE AS THE INFORMATION PROVIDED BY THE PARTICIPANTS. EACH CASE IS DISCUSSED IN TERMS OF THE OFFENCE COMMITTED, THE SANCTION APPLIED, AND THE SUBSEQUENT ACTIONS OF THE COMPANY TO REMEDY DEFECTS THAT CONSTITUTED AND/OR CONTRIBUTED TO THE VIOLATION. OF THE 19 COMPANIES CONVICTED, ORGANIZATIONAL DEFECTS WERE FOUND IN 15 CASES. OF THESE 15 CASES, 9 MADE SIGNIFICANT CHANGES IN STANDARD OPERATING PROCEDURES FOLLOWING THE PROSECUTION. TWO COMPANIES MADE MINOR CHANGES WHICH FORESTALLED THE POSSIBILITY OF AN EXACT REPETITION OF THE OFFENCE BUT FAILED TO RECTIFY THE GENERAL WEAKNESS WHICH THE OFFENCE REVEALED. IT IS CONCLUDED THAT THE PROSECUTIONS HAVE HAD A SUBSTANTIAL PREVENTIVE EFFECT ON THE COMPANIES INVOLVED. THE APPENDIXES INCLUDE VARIOUS ITEMS INDICATING THE KINDS OF CHANGES MADE BY THE COMPANIES SUBSEQUENT TO PROSECUTION. (RCB)