Effect of The Competition Law Changes On Small Businesses in Australia

Last week’s Harper review of the Australian competition law has been one of the biggest shake-ups for business law in lately.

The result? Confronting opinions and businesses left clueless as what will follow.

The BIG question now is if the Federal Government will implement the recommendations and what they will mean for small business owners.

The Harper’s Committee report includes two main recommendations:

  • for changes in the competition law institutions;
  • and for changes in the competition law itself.

One of the most important issues is Harper’s review’s call to amend the competition law to help stopping big companies take smaller ones out of business.

Main points of the review that matter for small businesses are

1. Breaking up the ACCA

(Australian Competition and Consumer Commission) into two separate institutions – one that deals with infrastructure and one that deals with consumers and competition

The affect of this might be that businesses need to deal with two regulators.

2. Introducing a new pricing regulatory body

The benefits of such a regulatory body are questionable, as the ACCA will keep its surveillance role. Provided that the two institutions are well aligned, the results can be beneficial for small businesses trying to compete with the always-decreasing big store chain prices.

3. Breaking the ACCA’s governance into smaller roles

The goal here is to ensure the self-regulation and control of the ACCA that is already accountable via numerous media publications, annual reports and regulations.

It is not clear if this recommendation will further improve it’s functioning or just make it harder to understand and navigate.

4. Implementing a new civil prohibition on concerted practices and simplifying cartel laws

The market strength of retailers and store chains has been one of the reasons for the Harper’s review. The increased power of cartels often makes it near impossible for small businesses to compete.

The biggest implication of the report will be that bigger companies will not be able to use market power to fight smaller rivals.

The changes are meant to prepare Australia for the future of trade and commerce but they are not welcomed with applauses by everyone.

What should small businesses do?

First of all – expect many changes. Not in competition law, but in the way the report is implemented and discussed.

For example, many consider the draft report of Harper issues in 2014 to have been more beneficial for small businesses than the final one.

For now, all you can do as a business owner is wait. The Australian Federal Government has announced that it will devote the next 8 weeks to analyzing and listening to arrive at a decision about the implementation of the recommendations. After a response has been issued, Minister Billson will put an action plan in place by the end of the year, reports indicate.

This means that apart from following the topic and staying up to date with the next, there is not much for small businesses to do at this point.

Make sure you have a trusted lawyer on your side that will be able to explain the implications for your particular business when the time comes.

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