The regulator’s approach to compliance

In The regulator’s approach to compliance: Crackdown, confrontation or compliance culture ACCC Commissioner David Smith provides some insights into what influences the ACCC’s dealings with businesses:
"The kinds of things that influence the Commission in our decision making when potentially unlawful conduct is detected and investigated include:
• whether the conduct involves a blatant disregard of the law
• whether the person, business or industry has a history of previous contraventions of competition or consumer laws
• the detriment caused by the conduct and avenues available to redress that detriment
• whether the conduct is of major public interest or concern
• whether the conduct is “industry wide” or is likely to become widespread if the Commission doesn’t intervene
• the potential for action to educate and deter future conduct

It is significant that the first 2 points are in the hands of the business itself.

This point is reflected in Mr Smith’s closing comments:
"It’s still a fact that most businesses implement trade practices compliance programs only after the event, as a result of a direct ACCC action against them or another business in their industry.

As I said at the outset, particularly in this new environment, it is eminently more sensible to have business comply with the Act in the first place, rather than act in a way that does damage to both consumers and the business, and then to try to undo the damage later.

Given the massively increased financial penalties and possible criminal sanctions that corporations and their executives now face for ignoring this obligation, I suggest it will now be crucial that a corporation be able to demonstrate to its shareholders the existence of a corporate culture that is effective in the management of compliance.

To do this, a company needs a system of deep-rooted values, attitudes and beliefs that affect the way those within the company perceive the company itself and what it stands for and the way it perceives its relationship with suppliers, customers and regulators."

There’s always a gap between what a business sees as appropriate and what a regulator would prefer (assuming both views are within the law) but these comments give some clear guidelines to anty business trying to persuade a regulator that their view is correct.

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