SMEs urged to report competitors

Anti-competitive practices are damaging the UK's small businesses and the Office of Fair Trading is calling for them to fight back.

Research from the OFT shows a quarter of small firms believe they are harmed by anti-competitive activities such as price-fixing and collusion and a third are aware of such issues within their own industry. The OFT wants SMEs to report breaches of competition law so action can be taken. (This follows on from its recent Champion Competition campaign, reported in our article, Know your competition law.)

However, it could have its work cut out as the research showed less than a quarter of small businesses would report price-fixing between competitors and fewer than one in ten would inform the OFT of a larger competitor cutting prices to force them out of the market.

‘Practices such as price-fixing and bid-rigging harm the competitiveness of our economy,’ states Sir John Vickers, OFT Chairman. ‘SMEs have rights and obligations under competition law and can work more with the OFT to identify and stop anti-competitive behaviour. We must ensure that SMEs are informed about – and in turn inform – our work.’

‘What is interesting is that even when they experience anti-competitive practices, the reaction of the small firm owner is to soldier on without turning to the authorities,’ explains Professor David Storey, Director of the Centre for SMEs at Warwick Business School. ‘But using their rights under competition laws they can level the playing field to give them a better chance to beat the competition.’

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