Anti-Competitive Behaviour: Examples, Risks And How To Stay Compliant

If you run a small business, competition is part of everyday life. You might be trying to win customers, keep prices competitive, build supplier relationships, or expand into new areas.

But there’s an important line between competing hard and crossing into anti-competitive behaviour (sometimes called anti-competitive conduct or anticompetitive conduct). And in Australia, that line is enforced by the Australian Competition and Consumer Commission (ACCC) under the Competition and Consumer Act 2010 (Cth).

The tricky part is that anti-competitive issues don’t just come up in “big corporate” scenarios. They can happen in everyday small business situations - like talking to a competitor about pricing, trying to lock in a supplier, or negotiating with distributors.

Below, we’ll break down what anti-competitive behaviour is, give practical examples, explain the real risks, and share practical steps you can use to stay compliant as your business grows.

What Is Anti-Competitive Behaviour?

Anti-competitive behaviour is generally business conduct that harms the competitive process.

In many cases, the legal test focuses on whether the conduct has the purpose, effect, or likely effect of substantially lessening competition in a market (often shortened to “SLC”). However, it’s important to know some forms of conduct (such as cartel conduct and resale price maintenance) are treated very seriously and can be unlawful even without a detailed SLC analysis.

In plain English: it’s when a business does something that unfairly restricts competition - for example by fixing prices, blocking competitors from accessing customers or suppliers, or using market power in a way that stops others from competing on the merits.

In Australia, competition law focuses on protecting the competitive process (not protecting individual competitors). That means even if your intent is “just to stabilise the market” or “stop a race to the bottom”, certain conduct can still be unlawful if it harms competition overall.

Why This Matters For Small Businesses

For small businesses, the biggest risk is that you can accidentally step into anti-competitive territory during normal commercial decision-making.

Some common “pressure points” include:

• setting prices across a reseller network
• dealing exclusively with certain suppliers or customers
• collaborating with competitors (including local competitors in the same suburb)
• being asked to agree to “industry standard” pricing or terms
• trying to stop discounting that affects your margins

These issues usually show up in contracts, email threads, meetings, or informal conversations - which is why having clear internal rules and good legal documents matters.

Common Anti-Competitive Behaviour Examples Small Businesses Run Into

When people search for anti-competitive behaviour examples, they’re often looking for real-world scenarios, not textbook definitions.

Here are some common examples of anti-competitive activities that can arise in small business contexts.

1. Price Fixing (Including “Informal” Agreements)

Price fixing is where competitors agree (directly or indirectly) on prices, discounts, fees, or other pricing-related terms.

This can happen more easily than you’d think. For example:

• Two local service providers agree not to charge under a certain hourly rate.
• Competing retailers agree to stop discounting a product during peak season.
• Businesses agree to apply the same “surcharge” or standard delivery fee.

Even if the agreement is “not written down” or was said casually in a meeting or group chat, it may still raise serious legal risk. The ACCC can look at the overall conduct and communications, not just what’s in a formal contract.

2. Bid Rigging Or “Taking Turns”

Bid rigging is where competitors manipulate a tender or quote process - for example by agreeing who will win and who will submit a higher quote.

Examples include:

• Competitors agree to “take turns” winning contracts from a council or large customer.
• One supplier submits a “cover bid” so another business wins the work.
• Businesses agree in advance who will quote for which regions or customers.

This can be especially relevant in construction, cleaning, professional services, and government or corporate procurement.

3. Market Sharing (Territories, Customers, Or Product Lines)

Market sharing is where competitors agree not to compete against each other - for example by dividing up customers, geographic territories, or types of work.

Common anti-competitive conduct examples include:

• “You take the north side of town, we’ll take the south.”
• “We won’t approach your corporate accounts if you don’t approach ours.”
• “You do small jobs, we’ll only do large jobs.”

Sometimes business owners see this as a way to avoid conflict and keep work steady. Legally, it can be very risky because it removes genuine competition from the market.

4. Resale Price Maintenance (Telling Resellers Their Price)

Resale price maintenance is where a supplier tries to control the price at which another business resells their goods or services.

For example, if you supply products to resellers or distributors, it’s generally risky to:

• tell them they must sell at or above a set minimum price
• threaten to cut supply if they discount
• penalise them for advertising below a certain price

There are lawful ways to provide recommended prices, but the details matter. This is a classic area where getting advice early can prevent expensive mistakes.

5. Exclusive Dealing (When It Harms Competition)

Exclusive dealing is when a business supplies (or acquires) goods or services on conditions that restrict the other party’s freedom - for example requiring them to buy only from you, or not to deal with competitors.

Exclusive arrangements are not automatically illegal. They are common in many industries and can be commercially legitimate.

The risk increases when the arrangement has the purpose or effect of substantially lessening competition - for example where it blocks competitors from accessing key distribution channels or customers.

6. Misuse Of Market Power (If You Have A Strong Position)

If your business becomes a major player in a niche (even in a small geographic area), your conduct can be scrutinised differently.

Misuse of market power generally involves having substantial market power and engaging in conduct with the purpose, effect, or likely effect of substantially lessening competition.

Small businesses don’t always think this applies to them - but in some local markets, a business can have significant power, such as being the only supplier of a key input or service in a region.

Why Anti-Competitive Conduct Is Risky (Penalties And Practical Consequences)

It’s tempting to think competition law is only enforced against very large businesses. In reality, competition regulators can investigate and take action in many contexts, and “small business” is not a free pass.

1. Regulatory Investigations Are Disruptive

Even if a matter doesn’t end up in court, responding to regulator inquiries can be time-consuming and stressful. It can involve producing documents, explaining decisions, and managing communications carefully.

This is one reason it’s helpful to have clear internal practices and well-drafted contracts that reflect what you intended commercially.

2. Serious Penalties Can Apply

Competition law penalties can be significant. The exact consequences depend on the type of conduct, the facts, and who was involved, but potential outcomes can include:

• large civil penalties
• court-enforceable undertakings
• injunctions (orders to stop certain conduct)
• damages claims from affected parties
• legal costs and management distraction

Some cartel conduct (like price fixing, bid rigging, and market sharing) can, in serious cases, also expose individuals and businesses to criminal liability in Australia. This is one reason competitor discussions should always be handled carefully and escalated for advice early.

3. Reputational Damage And Commercial Fallout

Small businesses rely heavily on trust - from customers, suppliers, partners, and financiers.

If allegations of anti-competitive behaviour arise, the reputational impact can be immediate:

• customers may lose confidence in your pricing and fairness
• suppliers may reassess their relationships with you
• other businesses may avoid partnerships
• staff may feel uncertain about business stability

That’s before you even get to the cost of dealing with the dispute itself.

How To Stay Compliant (Practical Steps For Small Business Owners)

Most small businesses don’t set out to engage in anti-competitive behaviour. The goal is usually to protect margins, reduce uncertainty, or grow sustainably.

The safest approach is to build compliance into day-to-day operations so you’re not relying on memory or “common sense” when the pressure is on.

1. Be Careful When Communicating With Competitors

Competitor contact isn’t always prohibited - for example, you might be part of an industry association, attend networking events, or collaborate on legitimate projects.

But as a practical rule, avoid discussing:

• pricing, fees, discounts, margins, or future price changes
• which customers you will or won’t target
• territory allocations or “staying out of each other’s way”
• tender strategies or who will win a contract
• supplier boycotts (e.g. “nobody should supply that new entrant”)

If a conversation heads in that direction, it’s often best to clearly step away and document that you did not agree to anything.

2. Put Guardrails Around Pricing Decisions

Pricing should be set independently. If you use benchmarking, market research, or publicly available competitor pricing, that’s one thing.

But you should avoid arrangements where pricing is coordinated between competitors, even if the intention is “fairness” or “stability”.

If you need help documenting how pricing is set (especially if you have multiple sales channels), having clear Business Terms can help show customers and partners that your pricing and conditions are applied consistently and transparently.

3. Review Distribution And Reseller Arrangements Carefully

If you sell through distributors, agents, franchisees, or resellers, pay close attention to how you communicate about pricing and promotions.

This is where resale price maintenance risk can arise - especially if someone in your team sends an email like “you can’t discount below X” without understanding the legal implications.

It’s a good idea to have a standard process for reviewing these agreements, and to get a Contract Review if you’re using a template or negotiating terms proposed by another party.

4. Be Thoughtful With Exclusive Arrangements

Exclusive dealing is common - for example, a supplier may want certainty that you’ll purchase minimum volumes, or you may want exclusivity for a territory.

Before you sign, ask:

• What is the business reason for the exclusivity?
• How long does it last, and can it be terminated?
• Does it restrict the other party too heavily?
• Could it block others from competing in a meaningful way?

Often, the compliance risk is reduced by sensible drafting - such as shorter terms, reasonable exit rights, and clear performance obligations.

5. Train Your Team (Especially Sales And Procurement)

If you have staff who negotiate with suppliers, manage channel partners, or attend industry events, they’re often the first line of risk.

Consider giving your team simple guidelines on:

• what they can and can’t discuss with competitors
• how to respond if a competitor proposes pricing alignment
• when they must escalate an issue for legal review

It doesn’t need to be overly complex - the key is making sure everyone recognises the red flags.

Contracts And Paperwork That Help Reduce Competition Law Risk

Competition compliance is partly about what you do, and partly about how your business relationships are documented.

Well-drafted agreements won’t “fix” unlawful conduct - but they can reduce ambiguity, set clear boundaries, and help prevent accidental missteps.

1. Clear Customer-Facing Terms

Customer contracts and terms help you set out pricing, scope, limitations, and how disputes are handled. This can reduce the temptation to “coordinate” with competitors to handle customer pressure.

If you operate online, having Website Terms and Conditions is also a practical way to set consistent rules for customers using your site.

2. Distribution, Reseller And Supply Agreements (Drafted With Competition Law In Mind)

Many competition law issues for SMEs show up in distribution networks, reseller arrangements and supply terms - particularly around pricing communications, exclusivity and restrictions on how products are sold.

Having the right agreement in place (and a clear process for changes or special deals) helps keep expectations clear and reduces the risk of a well-meaning email or clause creating a compliance problem.

3. A Process For Getting Advice Before You Sign

Some of the highest-risk moments are when you’re offered a “standard” supplier agreement, a reseller arrangement, or an exclusivity clause and you feel pressure to sign quickly.

Having a clear internal rule like “we get legal eyes on anything involving pricing controls, exclusivity, or competitor collaboration” can save you a lot of time and stress later.

When you need tailored advice quickly, a Commercial lawyer consult can help you understand where the risk is and what practical amendments will reduce it.

Key Takeaways

• Anti-competitive behaviour includes conduct that harms the competitive process, and many competition law rules focus on whether conduct has the purpose, effect or likely effect of substantially lessening competition in a market.
• Common anti-competitive behaviour examples include price fixing, bid rigging, market sharing, resale price maintenance, and certain forms of exclusive dealing.
• Competition law risk can arise in everyday small business situations, including informal conversations with competitors and “standard” commercial contract clauses.
• Practical compliance steps include avoiding competitor discussions about pricing/customers, setting prices independently, and having internal guardrails for high-risk agreements.
• Clear contracts (including website terms, customer terms, and well-structured distribution/supply agreements) and a consistent review process can reduce misunderstandings and prevent accidental missteps.

If you’d like help reviewing a contract or setting up practical compliance steps to reduce the risk of anti-competitive conduct, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.