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SMEs missing out on benefits of competition

Campaign launched to highlight importance of competition law

92/05    24 May 2005

The Office of Fair Trading (OFT) has today launched a campaign to promote competition to small and medium sized enterprises (SMEs).

Research by the OFT has shown that while big business is enjoying increasingly high levels of understanding and knowledge about competition law in the UK - and reaping the benefits – smaller companies are lagging behind. Just 49 per cent of respondents from organisations employing between ten and nineteen people claimed awareness of the Competition Act, compared to 80 per cent of those from organisations with more than 200 employees.

The OFT has launched the 'Championing Competition' campaign to highlight the positive aspects of competition for business and to demonstrate to the SME community that competition should be embraced rather than feared. As well as promoting the benefits of competition to the SME sector, the OFT will help businesses avoid anti-competitive behaviour, for which significant fines can be imposed.

New OFT research on the Competition Act and consumer rights (see note) shows that nearly half of  UK businesses of all sizes are now aware of the Competition Act. However, only two out of five UK businesses have taken action to ensure they comply with the legislation. The main reason for this is that many companies still believe, wrongly, that competition law is not relevant to their organisation.

During the course of the campaign, the OFT will aim to highlight the benefits and advantages of a competitive market to UK businesses.

Sir John Vickers, OFT Chairman, said: 'This campaign will aim to improve understanding of competition law and how it can help SMEs. We want to help them seize opportunities that competition brings. It is important for SMEs to be aware of their rights and responsibilities under competition law so that they can take best advantage from competitive markets'.

The campaign aims to encourage businesses who are involved in anti-competitive behaviour like cartel arrangements involving, bid-rigging and price-fixing, to report such activities and take advantage of leniency policies that could exempt them from penalties.

General awareness of the Competition Act and the more recent Enterprise Act has grown significantly amongst all UK businesses during the last two years. Half of all firms surveyed claimed to have some knowledge of the law, demonstrating increased understanding. However, only 12 per cent claimed to know a 'fair amount' or 'a lot' about the law.

The OFT will build on its existing links with UK business organisations and trade bodies such as the CBI and the Federation of Small Businesses to ensure that the campaign benefits the widest possible audience. Particular attention will be focused on reaching those companies in sectors such as healthcare/pharmaceuticals and construction/home building and renovation – priority sectors for the OFT as set out in its recently published Annual Plan.

NOTE  

Research conducted by Synovate during April 2005. 2,048 interviews were conducted. Research commissioned by the OFT. 

For enquiries on this campaign contact:
Citigate Dewe Rogerson
Nico De Klerk:  020 7282 2827 Mobile: 07747 115 855
Richard Stephenson: 020 7282 2868 Mobile: 07970 623 864
Direct Fax:  +44 (0)20 7638 0233

Citigate Dewe Rogerson
3 London Wall Buildings
London Wall
London EC2M 5SY

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