The federal government aims to protect small businesses from unfair trading practices imposed on them by larger companies.
The government said, “Treasury will consult this year on the design of protections for businesses, including whether a principles-based prohibition should apply and whether specific unfair trading practices should target small businesses.”
Unfair practices may include bigger businesses:
- Using their superior bargaining power to pressure smaller suppliers into accepting unfavorable contract changes
- Discouraging smaller businesses from exercising their legal rights by suggesting possible commercial consequences
- Threatening to de‑list smaller suppliers in retaliation for seeking price increases to which they may have been contractually entitled
Bruce Billson, the small business ombudsman, said big businesses had been getting away with that kind of behavior because the law had a gap.
He said, “Dominant and powerful businesses know that if they wrote this kind of dodgy conduct into ‘a take it or leave it’ contract, they would likely breach the unfair contract terms laws. By not writing it down and behaving or conducting themselves in the same manner, they keep this harmful conduct outside the reach of the current law. This is unless it meets the very high bar of egregious conduct.”
In conclusion, the government’s consultation reflects its ongoing commitment to fostering a fair and equitable marketplace where small businesses can flourish. By addressing these unfair trading practices, the federal government seeks to level the playing field and ensure that larger, more powerful companies do not subject smaller businesses to undue influence.
By addressing these unfair practices, the federal government aims to protect small businesses, helping them thrive without fear of exploitation by larger, more powerful companies.