What are the penalties for breach of the Fair Trading Act?

The penalties for breaching the Fair Trading Act are designed to reflect the severity of the infringement and to deter companies and individuals from engaging in misleading or deceptive conduct. Under the Act, penalties for individuals can reach up to $600,000, while companies can be fined up to $10 million. This tiered approach to penalties emphasizes the greater liability and responsibility that companies have towards consumers compared to individuals.

The rationale behind these substantial fines is to ensure that businesses are held accountable for their practices, thus promoting fairness in the marketplace. High penalties also serve as a deterrent against the kinds of practices that undermine consumer trust and market integrity, such as false advertising or unfair trading practices.

Options that suggest lower penalties, like fines of $200,000 for individuals, do not align with the established penalties under the law. Similarly, imprisonment is not typically a component of the response to a breach of this Act, as it focuses more on civil penalties rather than criminal charges, and community service requirements are also not relevant in this context. Therefore, the most accurate reflection of the penalties under the Fair Trading Act is represented by the choice that indicates maximum fines of $600,000 for individuals and $10 million for companies.