CMA offers small business guides to competition law
A suite of materials aimed at helping small businesses understand the dos and don’ts of competition law has been launched by the UK's Competition & Markets Authority.
The move is in response to recent research which has revealed a lack of knowledge about competition law among smaller firms, putting them at risk of becoming either lawbreakers or victims of others.
Companies can access user-friendly advice on the law and how to comply, alongside information on what to do if they suspect another firm is breaking the law. The materials emphasise that companies which comply with the law face being put at a competitive disadvantage if their rivals flout the rules.
Earlier this year, the CMA commissioned an independent report which found that 77% of firms either did not know competition law very well or had not heard of it at all. Furthermore, although 55% of businesses knew price fixing was illegal, 18% wrongly thought it was acceptable to agree prices with rivals and 27% were unsure.
In addition, 23% of company representatives thought it was "okay to discuss prospective bids with competing bidders", 29% were unsure if bid-rigging was illegal, and 31% thought it was acceptable for businesses to agree not to sell to the same customers as each other.
Desire
However, further research reveals that most small businesses have a shared ethical sense that certain anti-competitive practices, such as price-fixing, are unfair or wrong and want to do the right thing. They also want straightforward materials that explain what the main behaviours that breach competition law are – price-fixing, bid-rigging and market-sharing – and how to comply with the law.
In response, the CMA has created a suite of materials, including eight animated films and a quiz, to help small businesses understand competition law and how it affects them. The short films, which can be watched on the CMA’s YouTube channel, flag up illegal practices such as bid-rigging, price-fixing and market-sharing, to explain what they are and how businesses can avoid being involved or falling victim to them.
Alongside these, the CMA has issued an at-a-glance guide to competition law, a checklist on what to avoid, and case studies about companies which have broken the law and how they were punished.
Alex Chisholm, CMA chief executive, said: "We have worked closely with groups representing small businesses to learn more about what they do and don’t know about competition law and they told us they need information that is short, simple and easy-to-use.
These new materials explain which behaviours are illegal, and why they cause harm. The victims of anti-competitive activity will often be other businesses, so knowing what illegal behaviour looks like and how to report it can help businesses protect themselves from others which are acting unfairly.
The potential consequences of breaking the law are very serious. That’s why it’s important that businesses know what to look out for and report this to the CMA to prevent other businesses and consumers from losing out.