David vs. Goliath: Can Your Small Business Compete with Giants?

compete with big business

Starting a business is thrilling, but facing off against established giants can be intimidating. Here’s how South Africa’s Competition Act helps level the playing field:

Fairness for All: The Competition Act

The Competition Act 89 of 1998 (the Act) champions a simple principle: a fair shot for everyone. This means big businesses can’t bully smaller ones out of the market.

How the Act Protects Your Business:

The Act tackles two key issues:

  • Anti-competitive behaviour includes companies working together to keep prices high or shutting out new competitors.
  • Dominant companies abusing their power: Just because a company is big doesn’t mean it can act unfairly.

What Does “Dominant” Mean?

Think market leader. They might not be the only player, but they strongly influence prices, trends, and competitor access.

The Act Says “No” To:

  • Excessive Pricing: Big companies can’t use their size to unfairly jack up prices, squeezing out smaller businesses.
  • Denying Access: If a small business needs something crucial to compete (like using a certain delivery network), a dominant company can’t unfairly block them.
  • Exclusionary Tactics: Big companies can’t push out smaller competitors through unfair practices.

A Common Misconception:

Some might think high prices from big businesses create a gap for smaller players with lower prices. But that’s not true. High prices from big players often raise production costs for everyone, making it difficult for small businesses to keep prices low in the long run.

The Competition Commission in Action:

The Competition Commission keeps an eye on the market. For example, they’re investigating online giants like Takealot and UberEats to ensure fair play.

It’s Not Just Big Businesses:

The Act applies to everyone. In 2020, a small company with just 4.7% market share was fined for excessively pricing face masks!

Don’t Get Caught Off Guard!

Understanding the Competition Act empowers you whether you’re a small business owner or a concerned consumer. If you have any questions about competition law, contact us at BBP Law. We’re here to help you navigate the market with confidence!

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