Navigating Australian Competition Law: What Small Businesses Need To Know

Thinking of starting or growing your business in Australia? Understanding competition law is essential.

It’s not just a “big business” issue. The rules shape how you work with competitors, negotiate with suppliers, set prices, run promotions, and deal with customers every day.

The good news: when you know the basics (and set up a few simple guardrails), you can compete confidently and avoid costly mistakes.

In this guide, we’ll break down the essentials in plain English so you can spot risks early, build good habits, and focus on growing your business the right way.

What Is Australian Competition Law?

Australian competition law promotes fair, effective competition and protects consumers. The main law is the Competition and Consumer Act 2010 (CCA). It’s enforced by the Australian Competition and Consumer Commission (ACCC). The Australian Consumer Law (ACL) sits within the CCA and covers fair trading and consumer protections.

The core idea is simple: markets work best when businesses compete on the merits-on price, quality, service and innovation-not through agreements or conduct that unfairly restrict competition.

In practice, the law covers how you deal with competitors, your customers and your suppliers. It also prohibits certain serious conduct outright (like cartels) and assesses other conduct by asking whether it has the purpose, effect or likely effect of substantially lessening competition.

Key Rules Small Businesses Should Know

1) Cartels And Collusion

Agreements or understandings with competitors to fix prices, rig bids, limit supply, or share markets are illegal. Cartel conduct can lead to very serious penalties, including criminal liability for individuals in some cases.

2) Concerted Practices

Even if there’s no formal agreement, “concerted practices” with the purpose or likely effect of substantially lessening competition can be unlawful. For example, sharing sensitive future pricing or strategy with a competitor can create a risk-especially if it softens competition in the market.

3) Misuse Of Market Power

Businesses with substantial market power must not engage in conduct that has the purpose, effect or likely effect of substantially lessening competition (for example, predatory pricing designed to eliminate rivals). Most small businesses won’t have “substantial” market power, but be cautious in local or niche markets where your position might be strong.

4) Exclusive Dealing (Including Third-Line Forcing)

Exclusive dealing occurs when you impose restrictions on how another business supplies, acquires, or resupplies goods or services. This is generally assessed under the “substantial lessening of competition” test-so it’s not automatically illegal.

Third-line forcing (supplying on the condition a customer buys from a specified third party) used to be per se unlawful, but it is now also assessed under the same competition test. Some arrangements can be protected by ACCC notification or authorisation processes-get advice before locking in exclusivity.

5) Resale Price Maintenance (RPM)

Suppliers must not dictate a minimum price at which resellers on-sell products. You can recommend a price (RRP), but you can’t enforce minimum resale prices or punish discounting. There is a notification pathway for RPM in some circumstances-if this is relevant to your model, seek guidance before setting pricing rules for stockists.

6) Misleading Or Deceptive Conduct (ACL)

Under the ACL, you must not mislead or deceive customers or other businesses-for example about pricing, quality, origin, discounts, “limited time” claims, or testimonials. Accurate advertising, clear terms, and honest communications are essential. If you want a deeper dive into core ACL protections, see Section 18 of the ACL (misleading or deceptive conduct).

7) Unconscionable Conduct

Businesses must not act in a way that is harsh or oppressive and outside acceptable business norms. This can arise in negotiations, contract terms, or how you exercise rights-especially when dealing with consumers and smaller operators. Power imbalance is a key factor.

8) Penalties Can Be Significant

Penalties for breaches can be very high. For companies, the maximum can be the greater of a large fixed amount, three times the benefit obtained, or a percentage of turnover for the breach period (for certain offences). Individuals can also face substantial fines and, for cartel conduct, criminal consequences. The safest strategy is proactive compliance.

How To Stay Compliant Day-To-Day

Build Practical Guardrails

• Don’t share future pricing, margins, cost data, or strategic plans with competitors.
• Avoid any discussion that could be seen as “agreeing” on prices, bids, customers, territories or output.
• Be careful with industry association meetings-stick to general industry issues, not competitively sensitive topics.
• Use public, aggregated information where possible, rather than competitor-sensitive data.
• Document independent decisions about pricing and strategy to evidence competition on the merits.

Train Your Team

Staff who handle sales, procurement, pricing, marketing and partnerships should know the basics-what’s off-limits, how to respond to competitor approaches, and when to escalate. Short, regular refreshers go a long way.

Set Up A Simple “Escalate & Check” Process

Make it easy for the team to ask before they act-particularly for exclusivity clauses, supplier or distributor restrictions, collaborations, joint promotions, data sharing, or any competitor contact.

Review Pricing And Promotions

Promotions should be genuine and accurately described. Keep records to substantiate claims (e.g. “was $X, now $Y”). If you run a reseller network, be mindful that trying to impose minimum resale prices is risky without protection via notification.

Use Clear Customer Terms

Transparent, fair terms help you meet ACL obligations around refunds, warranties, delivery and risk allocation. Clear processes for complaints and refunds reduce both legal and reputational risk.

Consider Collective Bargaining (If Relevant)

Small businesses sometimes want to negotiate with a supplier as a group. There are ACCC processes that can allow this in certain circumstances. Don’t form a buying group or coordinate pricing without understanding the boundaries and protections available.

Useful Contracts And Policies To Reduce Risk

The right documents make compliance easier day-to-day and help your team operate consistently. Consider the following (and have them tailored to your model):

• Customer Contract or Terms: Sets out pricing, delivery, warranties, refunds and liability in plain English. Clear customer terms support ACL compliance and reduce disputes. A simple starting point is a Customer Contract.
• Distribution Or Supply Agreement: If you appoint distributors or stockists, document territory, performance expectations, data use, and any exclusivity carefully so you stay onside the competition rules. A customised Distribution Agreement is essential.
• Privacy Policy: If you collect personal information (e.g. online orders or email sign-ups), you’ll need a compliant Privacy Policy and good data practices.
• Employment Contract: If you’re hiring, an Employment Contract and basic policies help with expectations, confidentiality and proper handling of business information.
• Non‑Disclosure Agreement (NDA): Use an NDA when sharing confidential information with suppliers, potential partners or distributors.
• Shareholders Agreement (if you have co‑founders): Clarifies decision-making, equity, exits and dispute processes. A well-drafted Shareholders Agreement reduces the risk of internal disputes disrupting your market strategy.

Tip: schedule periodic legal “health checks” so your documents keep pace with the business. A quick review can flag risks early-Sprintlaw’s Legal Health Check is designed exactly for this.

Common Scenarios For Small Businesses (And What To Watch)

Discussing “Market Rates” With A Competitor

It might feel harmless to compare notes on prices or margins “off the record”. Don’t. Sharing competitively sensitive information-especially future pricing-can create a concerted practices risk. If approached, politely decline and record the interaction.

Offering “Exclusivity” To Win A Key Retailer

Exclusivity can be legitimate but needs care. Ask: could this arrangement substantially lessen competition in a market? What alternatives exist? Would a narrower clause (e.g. a limited category or time) achieve the same goal with lower risk? Consider whether ACCC notification or authorisation is appropriate before signing.

Setting Minimum Resale Prices For Stockists

Don’t set or enforce minimum resale prices. You can set an RRP and run cooperative promotions, but threatening to cut supply if a retailer discounts is high risk. If you think minimum pricing is critical to your model, get advice on the RPM notification pathway.

Industry Association Meetings

Associations are great for training, standards and advocacy. Keep agendas clear, avoid competitively sensitive topics, and ensure meetings are well chaired. If a conversation drifts into sensitive territory, leave and note your objection.

Starting A Joint Promotion Or Collaboration

Joint initiatives can benefit customers and be lawful-provided they don’t restrict rivalry more than necessary. Limit data sharing to what’s necessary, avoid price coordination, and document competition-friendly objectives (e.g. launching a new product category or expanding output).

Advertising And Claims Under The ACL

Make sure discounts, “limited time” offers and performance claims are accurate and backed by evidence. Misleading or deceptive conduct is prohibited. A practical refresher is to revisit your obligations under Section 18 of the ACL before peak sales periods.

Growing Fast In A Niche Market

If you become the go-to player in a local or niche market, revisit your practices through a market power lens. The threshold is “substantial market power”, not just being big. However, growth may change your risk profile-especially around pricing strategies, refusals to supply and exclusivity.

Key Takeaways

• Competition law applies to businesses of all sizes and focuses on keeping markets fair and competitive for customers and honest operators.
• High‑risk areas include cartels, concerted practices, resale price maintenance, and (for firms with substantial market power) conduct that substantially lessens competition.
• Exclusive dealing (including third‑line forcing) is no longer automatically illegal-it’s assessed under the substantial lessening of competition test, and some arrangements can be protected by ACCC processes.
• Good habits-like refusing to share future pricing with competitors, training your team, and documenting independent decisions-go a long way.
• Use tailored contracts and policies (Customer Terms, Distribution Agreements, Privacy Policy, Employment Contracts, NDA, Shareholders Agreement) to embed compliance into daily operations.
• Review regularly as you grow-your risk profile can change with scale, new channels, or tighter supply arrangements.

If you would like a consultation on navigating Australian competition law for your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.