Recent findings by the Office of Fair Trading ('OFT') suggest that almost twenty-five percent of small and medium sized enterprises ('SMEs') believe they are being harmed by breaches of competition law. In addition, one-third of these businesses say that they are aware of anti-competitive practices within their industries. However, in spite of this knowledge of anti-competitive behaviour, SMEs seem to be reluctant to come forward and report these practices. Only twenty-two percent said that they would report any price-fixing situations, and even less, only nine percent, would be inclined to do this against a larger competitor who was trying to push them out of the market.
In order to address the somewhat problematic findings of this survey, the OFT have endeavoured to inform SMEs as much as possible about its work. Sir John Vickers, OFT Chairman, stated: "Practices such as price fixing and bid-rigging harm the competitiveness of our economy… we must ensure that SMEs are informed… and in turn inform"
In April this year the OFT launched its "Championing Competition" campaign (see Bulletins passim). This campaign set about trying to promote the benefits of competition to SMEs and also to raise awareness of their rights and responsibilities under competition law. It is thought that it will be handy for companies not just as a tool for keeping out of trouble themselves, but will also help them identify unfair practices within their industry. This campaign was launched following a previous survey which found that only forty-nine percent of businesses employing between ten and nineteen people claimed awareness of the Competition Act, compared to eighty percent of those businesses employing over two hundred people.
The reason for SMEs lack of awareness regarding competition law may be due to the fact that they perceive it as an area of concern solely for big business. This is not the case. Small, local breaches of competition law are very common. Recent OFT action has highlighted this, such as the discovery of a second Scottish roofing contractors cartel, which is covered elsewhere in this Bulletin.
It is paramount that small and medium sized businesses are aware of their rights and obligations under these laws. Professor David Storey, Director of the Centre for SMEs at Warwick Business School points out that awareness of the situation is in their best interests:
"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. But using their rights under competition laws they can level the playing fields to give them a better chance to beat the competition."