Posted by

Alex Chisholm

23 Jan 2015

One of the most common misconceptions about the Competition and Markets Authority (CMA) is that the work we do is only relevant to large businesses – limited, even, to the Square Mile. Competition and consumer law is seen by some people as complex, technical and inaccessible – out of touch with the day-to-day concerns of many SMEs.

In reality, nothing could be further from the truth. Competition law is highly relevant to SMEs. And the principles of fair competition are not difficult to understand or follow. First, fair, transparent competition between businesses – whatever their size, sector or geographical location – ultimately benefits not only the consumer, but other businesses and the economy as a whole. An open, fair market in which every business is given the opportunity to compete can only ever be in the interest of small companies.

Secondly, small companies depend on good quality services for their own operations. SMEs are customers for banking and energy – two sectors we are currently investigating – and need to be able to choose between competing providers offering good value services.

Thirdly, the consequences of non-compliance can be severe. Every company in the UK is subject to competition law and it is enforced just as rigorously for small companies as it is for the large multinationals.

Key to achieving open dynamic markets in which productivity and innovation can flourish is a culture of compliance within businesses themselves. The vast majority of UK businesses, even where no detailed knowledge of the law is present, strive to conduct business in a fair, ethical manner. Nevertheless, there are many factors that can contribute to anti-competitive activity and it is important to be able to spot these early on.

So what exactly is a culture of compliance and how do companies – particularly those who don’t have in-house legal advice – avoid potential pitfalls? The good news is that the key principles behind competition and consumer law are very straightforward. Simply following these principles, recognising the warning signs and knowing when a situation might require legal advice can go a long way.

To this end, the CMA has published a series of quick, one-page guides on key issues in competition and consumer law, as well as a document on how smaller businesses can comply with competition law. Widely applicable, these guides aim to empower businesses across the UK: giving them the tools and knowledge to help them make the right decisions, at the right time and help to achieve a true culture of compliance within their company. In turn, this will contribute to a thriving economy from which both businesses and consumers will ultimately benefit.

 All views expressed in guest blogs are that of the authors, and not of the British Chambers of Commerce.