COMMENT: Small business deserves protection from bullies

What a joke. An editorial in today’s Australian Financial Review claims that the changes to predatory pricing laws announced by Assistant Treasurer Chris Bowen and Small Business Minister Craig Emerson “cross a line by singling out particular competitors – small business – for protection.” The editorial goes on to accuse Bowen and Emerson of “genuflecting at the altar of small business” by making it easier to prove section 46 of the Trade Practices Act (concerning misuse of market powers) and giving the ACCC improved information gathering powers.

The AFR’s reaction is extraordinary, particularly considering our story yesterday, in which we revealed that several legal experts believe that the changes have not gone far enough and may not have much real impact on protecting small businesses from big business bullies.

We agree with the experts. Yes, the new laws are not perfect. Yes, the changes will need to be tested in court before small businesses can be certain they will offer more protection. Yes, it will still be tough for small businesses to prove predatory pricing.

But clearly the changes are only a step in the right direction and suggesting that small business has been singled out for special attention is crazy. In a small market such as Australia, where large companies tend to build dominant positions in particular sectors (retail, telecommunications, banking) laws that protect small businesses are crucial.

Perhaps the key change is the granting to the ACCC of greater powers to collect information. Regardless of the changes to predatory pricing laws, it will still be extremely expensive and time consuming for a small business to prove their case against a big bully.

Graeme Samuels said yesterday he has the full suite of powers he needs to prosecute market power abuses – small business owners will be looking to him to help find and support a test case.