2.5 - Business Legislation Flashcards
How do consumer protection laws affect businesses?
Businesses must ensure their products are safe, accurately described, and of satisfactory quality, influencing their research, development, marketing, and manufacturing processes.
What does the Trade Descriptions Act (1968) require businesses to do?
Businesses must not mislead consumers with false descriptions in packaging or advertising.
What do the Sale of Goods Acts (1979 & 1994) and the Supply of Goods to Consumers Regulations (2002) ensure?
Goods must be:
Fit for purpose
Of satisfactory quality
What does the Consumer Protection Act (1987) require?
Consumer goods must be safe, and specific regulations (e.g., fire-resistant materials for furniture) must be followed.
How does the Data Protection Act (2018) protect consumers?
Prevents firms from holding customer data longer than necessary.
Ensures data is only used for its specified purpose.
What role does the Environment Agency play?
It regulates businesses that release pollutants into water or land, while local authorities oversee air pollution.
What must businesses do to avoid environmental penalties?
Minimize pollution or face heavy fines.
Get authorization before creating excessive smoke or noise.
Comply with environmental health officers’ regulations.
What are key environmental laws affecting businesses? (5)
Waste Electrical and Electronic Equipment (WEEE) Regulations – Requires recycling of electronics (TVs, computers, etc.).
Landfill Tax (1997) – Discourages waste dumping.
Packaging Waste Regulations – Sets recycling targets for wood, paper, glass, and plastic.
Climate Change Act – Requires UK companies to report greenhouse gas emissions.
Green Subsidies (e.g., Renewable Heat Incentive) – Encourages businesses to use renewable energy.
How can following environmental laws benefit businesses? (4)
Avoids fines and legal issues.
Appeals to environmentally conscious consumers.
May become a unique selling point (USP) (e.g., “green” branding).
Helps businesses save money through efficient raw material use.
How does competition benefit consumers?
Encourages better quality products at reasonable prices.
Drives innovation and product differentiation.
What does the Competition Act (1998) regulate?
Prevents unfair business practices.
Enforced by the Competition and Markets Authority (CMA).
Businesses violating competition laws may face fines or prosecution.
What are examples of illegal anti-competitive practices?
Price fixing – Companies agreeing to keep prices above a certain level.
Limiting production – Creating artificial shortages to raise prices.
Market sharing – Splitting territories to avoid competition (e.g., one business sells only in Europe, another only in Asia).
When is a business considered to have a dominant market position?
When it holds at least 50% market share.
What business practices are illegal for dominant firms?
Exclusivity agreements – Forcing wholesalers/retailers to buy only from them.
Tying – Forcing retailers to buy additional products to access popular items.
Predatory pricing – Selling below cost to drive out smaller competitors.
