If you are a local business owner.it is important to understand your responsibilities under the Competition and Consumer Act. The RMB Lawyers Business & Commercial Transactions Division explains how to keep your business in the clear with the Australian Competition and Consumer Commission (ACCC).
Picture this scenario..
A big hailstorm hits Sydney, leaving chaos in its wake. Roofs need fixing, and roofers see opportunity to cash in.
Two rival roofing companies exchange messages on a Facebook roofing group: One writes: “This latest storm is the perfect opportunity for roofers in Sydney to increase pricing” and the other replies: “Let’s start from $XX and go up”.
Enter the Australian Competition and Consumer Commission, which is tasked with promoting competition in markets to benefit consumers, businesses and the community. The ACCC detected cartel conduct. Basically, cartels are secret clubs where businesses meet to manipulate prices or restrict supply.
These roofers might’ve thought they were just chatting. However, ignorance isn’t an excuse for the ACCC, which found the roofers were acting anti-competitively by attempting to fix prices. Many small and regional businesses are unaware of the specific competition laws that apply to them, which can lead to costly mistakes and legal issues.
Understanding these laws isn’t just about avoiding penalties – it’s also about creating fair practices that benefit both you and your customers.
Three issues your business might face:
- Price Fixing: This happens when competitors get together and agree on the prices for their products or services.
- Bid Rigging: In this scenario, suppliers secretly coordinate to decide who will win a tender and at what price.
- Price Maintenance: This occurs when a business demands that retailers sell their products at a certain price. If a retailer doesn’t comply, the business might refuse to supply them with products.
While these practices might seem like a useful business strategy, they are illegal and can have serious consequences, even for small businesses.
If you are concerned about your business practices or have received notice from the ACCC, RMB Lawyers have expert commercial lawyers who can provide you with the advice you need to ensure you aren’t acting anti-competitively. Begin the process by phoning on Freecall 1800 681 211 for a consultation, or use our 'Ask a Question' tool on our website.