I think overall the reliance on sweatshop labor is something that every company should be eliminating in their workforces, there is a ethical line that many companies should internally follow without being forced to follow by some Governmental law forbidding it, I think that any company producing a huge amount of profits could easily provide it's workers better conditions.
The companies that purchase goods from sweatshop factories are essentially on the frontline of the combat to end sweatshops, at least from an American standpoint. If they refuse to put their money in the pockets of these sweatshop owners, the business would not be a viable option for the offenders.
I believe companies should act on their own to eliminate reliance on sweatshop labor. Most people don't seem to realize that cheap clothing, like that found at Wal-Mart, is created under less than desirable circumstances and under wages that not even one person could live off of. Companies should have enough of an understanding of the world to realize these practices need to be avoided and they certainly shouldn't be upheld.
Companies should act on their own to eliminate reliance on sweatshop labor. They are all responsible for the different types of sweatshops that they run so yes they should work towards making improvements or doing away all together with these type of businesses. I would hope that each business would research and improve their practices.
It is not the companies fault. They are just trying to maximize the profits for the shareholders. What should be done is that the laws need to be changed. If the country had better labor laws it might on the short term decrease the economy but on the overall long term it would help.