Legal Issues Affecting Business Organizations in Australia
Recurrently, business entities engage in fraud or unfair practices in an attempt to gain advantage over their competitors. It is not always that these practices benefit consumers- on several occasions, business entities disregard the rights of the consumer. It is in this light that most governments, inclusive of the government of Australia, require business to submit information about their various products in a bid to ascertain if the products, in any way, infringe the rights of consumers. This is bid by governments to safeguard the rights of consumers is conventionally referred to as consumer legal protection.
The Level of Consumer Protection in Australia
However, even as governments, specifically the government of the Australia, demand that businesses disclose information about their various products, it does not pass without asking whether consumers in Australia have enough legal protection. From a personal point of view, I admit that the government of Australia is putting adequate measure to ensure that consumers have enough and dependable legal protection. This is vividly manifested in its enactment of several generic consumer protection laws, regulations as well as cooling-off arrangements for consumer arrangements. Such laws and regulations encompass; the Trade Practices Act (TPA) of 1974, the Fair Trading Act (1999), the Australian Securities and Investments Commission Act (ASIC Act) of 2001, Australian Consumer Law of 2011, Competition and Consumer Act of 2010. It is worth noting that, though enacted at different times, the laws jointly strive towards the protection of consumer rights with some being mere mirror images of others.
The Trade Practices Act (TPA)
For unclear reasons, special attention is always drawn to the Trade Practices Act (TPA) of 1974. The Trade Practices Act (TPA) was enacted in 1974 by the Commonwealth Government to prevent monopolistic business practices and exorbitant business conduct by promoting fair business practices amongst competing business organizations (Loots and Charrett, 2009, p. 12). The act has undergone numerous amendments ever since its enactment and is overly wide in scope. It was based on an American consumer protection legislation and has no any direct counterpart in Australian common law with regards to consumer protection (Loots and Charrett, 2009, p. 12). As Loots and Charrett (2009, p. 12) further report, TPA is perhaps the most formidable consumer protection enactment ever been passed in Australia. It is worth noting that, before the enactment of TPA, the protection of consumer rights was principally done by common law and State Legislations. Gifford (2009, p. 151) contends that several provisions in the TPA, are mirrored in the state legislation.
Misleading or Deceptive Conduct
Section 52 (commonly abbreviated s 52) is perchance the most significant section of the TPA. It outlines the “misleading or deceptive conduct provision”. The section reads “A Corporation shall not, in trade or in commerce, engage in conduct that is misleading or likely to mislead or deceive” (Lockhart, 1996, p. 231; Seddon, 2009). Breaching the dictates of the misleading or deceptive conduct provision attracts an injunction, a compensatory order, disqualification or a damages action; as Lockhart (1996, p. 232) asserts, damages actions is highlighted in section 82(1) of the TPA. It should be understood that this section is not only confined into resolving conflicts involving consumers and business entities, but is also applicable where a corporation avers to have suffered a loss following a misleading or a deceptive conduct (Loots and Charrett, 2009, p. 13; Seddon, 2009). According to this provision, conduct is considered misleading or deceptive if it causes (or is likely to cause) an error. For instance, the selling of motor vehicle to a consumer without an accurate disclosure of the fuel consumption rate of the vehicle to the buyer culminates to misleading conduct. Likewise, the selling of a shop a buyer by exaggerating the profitability of the shop culminates into another misleading conduct.
Extent of Incorrect or Misleading Labeling of Goods or False Advertising in Australia
Even with Legislations such TPA and the establishment of competition regulator of Australia (Australian Competition and Consumer Commission, ACCC), misleading or deceptive practices such as false advertisement and misleading labeling of goods are common occurrences. It is disturbing that most of such conducts oft go unnoticed with the consumers being greatly affected. For example, in April 2012, Google was found guilty of running a false advert in which searches using key words such as Honda led consumers to rival sites. In 2008, Tim Longhurst, a blogger, complained bitterly when he realized that an advert reading “Find your next home on your phone for free” was not actually free as it was alleged by the advert. Just like false adverts, misleading labeling of goods is yet another common practice in Australia. As reported recently, ACCC fined Eucalyptus Oil Supplier for falsely labeling some of their products. In a similar incident, Coles and Woolworths, one of the leading supermarkets in Australia was taken to task for having falsely labeled some of their fruit products. In the suit, Coles and Woolworths™ was fined for labeling the fruit products as “Product of Australia” when the fruit product was actually produced in the United States of America.
Concisely, the Australian government has enacted several consumer legal protection Legislations. Such Legislations include Trade Practices Act (TPA), the Fair Trading Act, the Australian Securities and Investments Commission Act (ASIC Act), and Australian Consumer Law, among others. Of all these Legislations, TPA is famous for unknown reasons. TPA was chiefly devised to prevent business from indulging in monopolistic practices. Section 52 of the act that talks about Misleading or Deceptive conduct is of much relevance as far as consumer legal rights are concerned. Nonetheless, even with the existence of these legislations misconducts such false adverts and misleading labeling of goods are still common occurrences in Australia.
The most important Legal issue in Australia
Admittedly there are a plethora of issues that regulate the operations of business organizations. It is also admissible that these laws are of varying importance to variant groups of people. We as a group, after a comparatively long period of consultation, came to a contention that the issue of consumer rights protection is perhaps the most crucial legal issue that Australian business organizations have face. It is indubitable that, for any business, consumers are the most important component that determine the mode of operation of the business organizations. The worthiness of a business venture is by all means regulated with the amount of sales that the business can attract. Since these assertions are openly understood by business organizations, the business organizations are always ready to do anything, including misleading the consumers, in an effort to attract more sales. This renders consumer protections an important legal issue in the word of business.
It is encouraging though that the government of Australia appreciates the gravity of this issue and has put in place several legislations to help moderate the operations of business organizations with regards to consumer protection. Regarding to the few incidences of infringements of consumer right, it should be noted that the government’s effort is ineffectual if consumers cannot join in fighting for their rights. According the widely known maxim of Caveat emptor (translated into English as “let the buyer be aware”), it is imperative that consumers are do everything to safeguard their own consumer rights. The consumers should inspect goods and services presented to them by business organizations.
Enough, Not Enough or Excess Regulations
However, without proper inspection, it can be easily asserted there are more than enough regulations for business in Australia. On the contrary, we as a group are opinionated that the existing number of regulations is enough. While making this assertion, we as a group underscore that a good number of business regulation laws are a mirrored in other laws but it a matter of great concern that there are several issues relating to business that should all be regularized hence the call for a great number of regulations. Similar, the provisions of various regulations like the TPA have always been captured in new laws- several TPA provisions have been captured in the Australian Consumer Law (ACL). Since such laws are still being referred to on various occasions, it always appears as though there is an avalanche of business regulations in Australia while, in actual sense, the regulations are adequate.
Necessary legal changes
As noted earlier, there are several regulations that govern business practice in Australia. With respect to the most contentious issue of consumer rights protection, as mentioned in this paper, it was seen that even with the existence to stern legislations to safeguard consumer protection, several cases of infringement of consumer right, a discovery that warrants the institution of the of the effectiveness of the currents Australian Consumer Law, at the beginning we thought that this law should be changed (or amended) but after a careful consideration and comparison of effective consumer laws in various countries, we found out that the Law does not require any serious amendment as the moment. We also could not come up with any legal change that can be undertaken in Australia at the moment to warrant a flawless business environment.
Reference List
Gifford, N., 2009. Information Security: Managing the Legal Risks. Sydney: CCH Australia Limited.
Lockhart, C. (ed.)., 1996. Misleading or Deceptive Conduct: Issues and Trends. Leichhardt: The Federation Press Pty Limited.
Loots, P., and Charrett, D., 2009. Practical Guide to Engineering and Construction Contracts. Sydney: CCH Australia Limited.
Seddon, N., 2009. Government Contracts: Federal, State and Local. Leichhardt: The Federation Press Pty Limited.
