The research, carried out by the OFT, found that one in three
SMEs are aware of anti-competitive activities in their industries,
but that only 22% would report price-fixing agreements between
competitors.
Only 9% would report a larger competitor trying to push them out
of the market by cutting its prices to below cost.
According to the OFT, many SMEs may be missing out on the
benefits of fair and competitive markets, and it calls on the
enterprises to work with the OFT to take action against companies
who break competition law.
The survey also shows that more than half of businesses feel
that the industry in which they operate could increase its
competitiveness. More than a third of SMEs think that new companies
have difficulty entering markets and 16% say they cannot compete
freely and fairly for new contracts, and this figure is even higher
for some industries, for example construction, at 21%.
'”Practices such as price-fixing and bid-rigging harm the
competitiveness of our economy,” said 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
Angelo Basu, a competition law specialist with Pinsent Masons,
the law firm behind OUT-LAW.COM, welcomed the OFT's attempt to
encourage more SMEs to assist its efforts to drive anti-competitive
behaviour out of the market. But he says this is hampered by the
OFT's recent tightening-up of the level of evidence that is needed
to persuade it to start an investigation.
"The cost implications for SMEs of this should not be
underestimated," he said, "in particular in relation to allegations
of pricing below cost which are very difficult for SMEs to
establish against larger and more financially-sophisticated
businesses."
Basu continued: "This is a serious disincentive on SMEs pursuing
complaints. Many SMEs may feel that they would rather take their
chances with being a victim of a cartel or predatory pricing than
risk sinking their limited resources into a complaint on which the
OFT might not act.
