My small business is being bullied by a larger business. What can I do? Small business lawyer series – article 2

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Table of Contents

• When does bullying arise?
• Small Business Commissions
• Conclusion

Many small businesses have experienced bullying at the hands of larger business and corporations. However, due to the fact that many small businesses lack the necessary resources to be able to resolve disputes with these larger businesses and/or proceed to litigation, smaller businesses have been unable to effectively exercise their contractual rights.

This has become quite a prevalent problem in Australian society as, according to the NSW Small Business Commissioner, small businesses make up 96% of all business in Australia. The contribution that small businesses make, in providing new and innovative products and services at competitive prices, is extremely valuable to our economy and our society, and as such, is something we need to protect. Small business lawyers recognise this fact and are available to assist you if you believe that your business is being bullied by a market competitor.

When does bullying arise?

Bullying can arise at various points during the life of a business. Generally, bullying arises when a business engages in anti-competitive behaviour.

Anti-competitive behaviour includes:

• Creating anti-competitive agreements;
• Cartels;
• Collective bargaining and boycotts;
• Exclusive dealing;
• Imposing minimum resale prices;
• Misusing market power;
• Predatory pricing;
• Price signalling;
• Refusing to supply products or services; Or
• Engaging in unconscionable conduct.

For more information on what constitutes anti-competitive behaviour, please see our article “What is anti-competitive behaviour? Am I engaged in or losing business to it?”.

Bullying can also arise when a party to a contract refuses to comply with the terms of an agreement it has entered into. If you were considering entering into a contract with another business, it would be a good idea to get your contract drafted by a small business lawyer so he or she can carefully prepare the contract and ensure that it is binding on all parties involved. If you have already entered into a contract with another party who is not complying with the terms of the contract, a small business lawyer can review your contract and give you legal advice on the binding terms of the contract, and what you can do to demand compliance with the terms.

Small Business Commissions

If you find yourself in a position where your business has been bullied and this has resulted in a dispute between the parties, there are several options available to you to resolve this dispute.

For example, you may approach the Small Business Commission (SBC) in your particular state to assist in resolving the dispute before resorting to litigation.

The development of the SBC across Australia has served an important function in providing a dispute resolution service for businesses of various sizes and capacities. While the SBC is not a court, and its judgments are not binding, it has, thus far, proven successful in mediating disputes between parties as an alternative dispute resolution mechanism.

The commissioner of the SBC can ask a party to produce evidence and answer questions during a mediation session, which provided small-business owners with the power to assert their contractual rights against a larger business, despite their limited financial resources.

Conclusion

If you believe that your business is being bullied and you would like to know your rights in the matter, we recommend speaking with a small business lawyer as soon as possible. In the mean time, for information regarding the NSW Small Business Commissioner, please visit: http://www.smallbusiness.nsw.gov.au/home