Legal Environment (AQA A Level Business): Flashcards
Exam code: 7132
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Define legal environment.
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Cards in this collection (39)
Define legal environment.
The legal environment refers to the laws, regulations and legal systems that businesses must operate within, both in the UK and in any other countries they trade with.
What are the two main sources of legal change?
The two main sources are legislation, which is new laws passed by Parliament, and case law, which is court rulings that set a precedent.
True or False?
Because businesses cannot control the legal environment, legal change only creates threats.
False.
Businesses must comply with the law, but legal change can also create genuine opportunities, such as new markets.
How can complying with stronger consumer or data protection laws give a business an advantage?
Complying, and even going beyond the bare minimum, can build customer trust and loyalty. This gives an edge over rivals who are slower to adapt.
How can the legal recognition of a new technology create an opportunity?
A law that formally permits something previously unregulated or restricted can open up an entirely new market, such as self-driving vehicles.
Clear, well-enforced protection for patents, trademarks and copyright gives businesses more confidence to ____ in new products or ideas.
Clear, well-enforced protection for patents, trademarks and copyright gives businesses more confidence to invest in new products or ideas.
How can new legal requirements create opportunities for other businesses?
They create demand for compliance services, such as advice, technology or services that help businesses report, audit or change practices.
How can simplifying legal reporting requirements benefit a business?
It reduces the time and money spent on compliance, freeing up resources for other projects.
How did the 2021 Uber Supreme Court ruling show the threat of court rulings?
The court ruled that Uber drivers must be classed as workers rather than self-employed, entitling them to the minimum wage, holiday pay and pension contributions. A single ruling reshaped legal obligations across the gig economy.
How can stricter competition law enforcement threaten a business?
Regulators can block mergers or takeovers, or fine businesses, if a deal or practice would reduce competition and harm consumers.
True or False?
Ongoing legal challenges can create legal uncertainty for a business.
True.
A court ruling can be challenged, and the law may change again on appeal, so ongoing cases create legal uncertainty for business planning.
How does data protection law affect marketing?
It affects how businesses collect and use customer data, including whether customers must actively opt in to receiving communications.
How can legal change affect the finance function?
Legal rulings and new regulations can create sudden, significant financial liabilities that must be planned for, alongside ongoing compliance costs.
Product safety, labelling and environmental regulations can require a business to change its processes, _______ or sourcing.
Product safety, labelling and environmental regulations can require a business to change its processes, packaging or sourcing.
Define consumer protection law.
Consumer protection law sets out legal rights for customers and legal obligations for businesses.
The Consumer Rights Act 2015 requires goods to be of satisfactory quality, fit for _____ and as described.
The Consumer Rights Act 2015 requires goods to be of satisfactory quality, fit for purpose and as described.
True or False?
Consumer protection law only creates costs for businesses.
False.
It also builds customer trust and loyalty, creates a level playing field and gives a clear legal benchmark. Some businesses use generous returns policies as a competitive advantage.
What do the UK rules banning drip pricing require businesses to do?
Businesses must display the full price upfront, including any fees, rather than revealing extra charges at the final stage of checkout.
Define employee protection law.
Employee protection law sets out the legal rights employees have at work and the responsibilities businesses have towards their staff.
What does the Equality Act 2010 make illegal?
It makes it illegal to discriminate against an employee or job applicant because of a protected characteristic, such as age, disability, sex or race. It also requires reasonable adjustments for disabled employees.
True or False?
Employee protection law can offer advantages to the business as well as to employees.
True.
It can improve morale, motivation and retention, reduce the risk of costly tribunal claims and help attract talent.
How can employee protection law reduce a business's flexibility?
It can be harder and slower to dismiss staff, since the business must follow a proper legal process.
Define competition policy.
Competition policy refers to laws and regulations designed to promote fair competition between businesses and prevent anti-competitive practices, such as price-fixing, cartels or abusing a dominant position.
Why can competition policy be a drawback for a business planning to grow?
It can block or delay mergers and acquisitions, preventing a business from expanding or achieving economies of scale as planned.
Competition policy can create opportunities for rivals, who may gain __________ if a merger is blocked.
Competition policy can create opportunities for rivals, who may gain market share if a merger is blocked.
Define environmental protection law.
Environmental protection law sets legal limits and requirements on businesses to reduce environmental harm.
Under the Climate Change Act, the UK is legally committed to reaching ______ greenhouse gas emissions by 2050.
Under the Climate Change Act, the UK is legally committed to reaching net zero greenhouse gas emissions by 2050.
Why must marketing take care with environmental claims?
Marketing must ensure environmental claims are accurate to avoid accusations of greenwashing.
What is the role of the CMA?
The Competition and Markets Authority (CMA) is the UK government body responsible for ensuring that markets work fairly and competitively. It investigates mergers, cartels and practices that may harm consumers.
What new power did the Digital Markets, Competition and Consumers Act 2024 give the CMA?
It gave the CMA the power to investigate and fine businesses directly for breaching consumer law, without going through the courts first.
Under its new powers, the CMA can fine a business up to 10% of its global ______.
Under its new powers, the CMA can fine a business up to 10% of its global turnover.
True or False?
The CMA's new fining powers gave businesses more time to adjust their pricing practices.
False.
Enforcement became faster and more direct, which raised the financial and reputational stakes of getting pricing and marketing wrong.
What rights does the Employment Rights Act 2025 give zero-hours workers?
Zero-hours workers have a right to be offered a contract reflecting the hours they actually work and to have reasonable notice of shifts. They can also receive compensation if a shift is cancelled or cut short at short notice.
Why is the Employment Rights Act 2025 a particular challenge for hospitality and retail businesses?
These sectors rely heavily on zero-hours staff, so they must predict and guarantee hours in a way that may conflict with unpredictable customer demand.
How did many employers prepare for the phased introduction of the Employment Rights Act 2025?
Many reviewed scheduling practices and staff contracts ahead of time. This included auditing the hours zero-hours staff typically work and budgeting for shift-cancellation payments.
True or False?
Under the Fuel Finder scheme, every UK petrol station must report any price change within 30 minutes.
True.
The scheme sets a 30-minute reporting deadline for every price change, and fines apply to stations that do not comply.
How does the Fuel Finder scheme increase price competition between petrol stations?
Comparison apps and sat-navs show real-time prices from every nearby station, so customers can compare live prices before choosing. Stations lose the ability to quietly keep prices high.
What does the UK's ZEV Mandate require of car manufacturers?
The Zero Emission Vehicle (ZEV) Mandate legally requires a rising share of every manufacturer's new car sales to be zero-emission, with fines for non-compliant cars sold above the allowance.
Rather than paying fines under the ZEV Mandate, many manufacturers bought spare _____ from rivals that had sold more electric cars than required.
Rather than paying fines under the ZEV Mandate, many manufacturers bought spare credits from rivals that had sold more electric cars than required.
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