Corruption Case Study Overview

A company that produced and marketed a series of pills.

NPL's relaxant pill, advertised as an anti-depressant.

NPL used bold and attention-grabbing advertising, including suggestive visuals.

NPL's rejuvenator pill, marketed for improved energy and vitality.

A group that filed a lawsuit against NPL's marketing of pills.

Shops operated by NPL within the network of tourist resorts, used to sell the products.

The ads for Lal Pari and Neel Pari, while effective, were criticized for their suggestive imagery and content.

Despite criticism, the high sales of Lal Pari and Neel Pari drove substantial revenue growth for NPL.

Business-to-consumer auctions where the auction website is a party to the transaction, having knowledge of traded goods.

Consumer-to-consumer auctions where the auction site isn't a party to the transaction, lacking knowledge of traded goods.

Under Section 79 of the IT Act, an intermediary isn't liable for third-party offences if they prove a lack of knowledge or exercised due diligence.

A crucial element for determining criminal liability, in cases where the platform lacks it (like in C2C auctions).

US legislation protecting online service providers from liability for user content. Providers are not treated as publishers of user-provided information.

US legislation that, along with CDA, shields online service providers from liability in certain cases, protecting them from user actions.

Auction sites can avoid liability if they show they were unaware of illegal user activity – important as a defense strategy.

US law largely exempts auction sites from liability for the actions of their users, based on protections under CDA and DMCA.

Microsoft allegedly forced PC makers to incorporate its internet browser (IE) with its Windows 95 OS, violating US antitrust laws by abusing its monopoly power in computer operating systems.

US laws promoting fair competition and preventing monopolies to ensure consumers get the best value for their money.

A situation where one company has significant control over a market, reducing or eliminating competition.

A cornerstone US antitrust law, enacted in 1890, intended to prevent monopolies and promote competition.

Increasing revenue figures artificially, without corresponding legitimate earnings

Incorrectly categorizing expenses on financial statements

Found Microsoft guilty of violating US antitrust laws, ordering the breakup of Microsoft into two entities.

Deliberately manipulating financial records to show a false picture of a company's financial performance

Obstacles that make it difficult for new companies to enter a market.

A programming language designed for cross-platform compatibility, but Microsoft created its own version optimized for Windows.

Financial wrongdoings found in a company's branch or subsidiary, rather than the parent company

US law increasing the accountability of executives for financial reporting of their global subsidiaries and causing higher financial penalties for wrongdoing

Microsoft's plan to control the market through its position as the operating system provider (Windows), by bundling its internet browser with operating systems, which reduced options for consumers and created high entry barriers to competitors.

Unusual or illegal financial activities, often related to concealing or misrepresenting financial data within a company

Fake documents created to mislead or conceal financial information

Greater financial punishments imposed due to increased oversight

Thoroughly vetting top managers during the hiring process, focusing on their success AND failure handling.

Implementing regular audits for overseas branches and subsidiaries, ensuring closer oversight, by using regional CFOs and internal audit staff.

Internal auditors should report directly to an independent third-party (e.g., the board).

ERP (Enterprise Resource Planning) systems provide transparency in accounting and reporting.

External auditors are ultimately responsible for the accuracy of financial accounts that they pass.

Establishing and implementing a clear and consistent organizational policy related to ethical conduct.

Implementing too many controls can hinder decision-making and significantly increase costs for companies.

Recognizing that risk is naturally part of any operation.

A major industrial accident in 1984 at a Union Carbide pesticide plant in Bhopal, India, releasing a toxic gas cloud that killed thousands and injured many more.

A highly toxic chemical used in the production of pesticides. It was the primary gas released in the Bhopal disaster.

The Bhopal plant lacked adequate safety measures, including a proper alarm system, evacuation plan, and trained personnel.

Union Carbide's cost-cutting measures resulted in a reduced workforce, inadequate maintenance, and compromised safety standards.

An uncontrolled chemical reaction that can lead to a rapid release of heat, pressure, or toxic substances.

The location of the plant in a densely populated area, storage of highly toxic chemicals, and lack of safety measures raised serious ethical concerns.

The Bhopal disaster resulted in a high death toll, long-term health problems for survivors, and significant environmental damage.

The Bhopal disaster highlights the importance of industrial safety, ethical business practices, and environmental responsibility.