Small Business And Australian Consumer Law Essay

Question:

Discuss about the Small Business and working with the Australian Consumer Law.

Answer:

Introduction:

According to an estimate, more than 2 million small businesses are actively trading in Australia. All these small businesses have been provided rights and responsibilities by the Competition and Consumer Act, 2010. The Australian Consumer Law is also part of this legislation. The Australian Competition and Consumer Commission (ACCC) has the responsibility to communicate promptly and clearly with small businesses (Jones Ram and Edwards, 2006).

Therefore, while the Commission generally is not involved in individual disputes, it plays an important role in providing guidance to small businesses. Similarly, the ACCC also helps the small businesses in dealing with their individual matters. Similarly, wherever it is possible, the ACCC also directs the small businesses in adopting the alternative dispute resolution processes. The focus of the commission is on small businesses (Johnson, Macmillan and Woodruff, 2002). There are a number of areas in the Australian Consumer Law that have a significant impact on small businesses. The first such area is anticompetitive behavior. There are certain business practices, which results in preventing or limiting competition (Corneliussen, 2005). These practices are against the law. It is very significant that the small businesses are aware of their rights and obligations, particularly when they are dealing with suppliers, wholesalers and other businesses. Therefore, small businesses have certain rights and protections that have been provided to them by the law. For example, if it is found that the goods or services that have been purchased by a small business fail to do what they are supposed to do or if there is something wrong like anticompetitive behavior or a false or misleading claim, the small business can report to the Commission (Cosh and Hughes, 2003). The next protection provided by the ACL to small businesses is related with the unfair contract terms. The small businesses have to enter into standard form contracts while they are dealing with other businesses. Similarly, some businesses may also decide to use the standard forms while they are dealing with their customers. It is very significant that the small businesses are aware of their rights and obligations, particularly in view of the new unfair contract terms legislation. The Australian Consumer Law has also imposes an obligation on the small businesses to feed their consumers fairly. At the same time, it is very significant that the small businesses are aware of the rights that have been provided to the consumers by the ACL. DAC also requires that if a country of origin claim has been made regarding the products, it is necessary that such claims should be accurate, clear and truthful. Therefore if a business has decided to make a country of origin claim or, it is required under the law to make such a claim, it should be ensured by the business that a false or misleading claim is not made in this regard (van Stel and Stunnenberg, 2006). The mandatory as well as the voluntary industry codes are regulated by the ACCC. Similarly, the ACCC also provides guidance to the industries who are willing to develop their own voluntary code. Similarly, buying a franchise can also be a rewarding and an exciting experience for the business (Chittenden, Kauser and Poutziouris, 2002). But in this regard, it is important that the business is aware of its rights and obligations that have been mentioned in the Franchising Code of Conduct. Are the same time, the ACCC can also provide guidance to the franchisors and franchisees.

For a number of years, the ACCC has authorized the collective bargaining arrangements made by the small businesses. For this purpose, the ACCC wants to offer streamlined process to the parties who are looking for the authorization of collective bargaining agreements (Parker, 2007). In terms of productivity, the law requires that the business should ensure that all the products that are supplied by the business to its customers are safe and similarly is also required that these products should meet the consumer guarantees that have been provided by the Australian Consumer Law (Carpentier, L'Her and Suret, 2008). Similarly, the businesses cannot sell the products that have been banned by the law. The businesses are also under an obligation to make sure that the products or the services related with the products comply with the applicable mandatory standards before these are available to the consumers (Battisti, 2009).

Conclusion:

In this way, the ACCC plays the role of promoting the welfare of the consumers in Australia by providing a fair and competitive marketplace. In this way, it can be said that the purpose is to protect the competition and not the competitors. The test that can be used for this purpose is to see if a particular course of conduct may result in significantly decreasing competition in a particular market for goods or services. One such difficulty that is present in this regard is the lack of understanding regarding the difference that exists between protecting the competition and protecting the competitors (Kitching, 2007). While the small businesses want that the focus of the competition policy should be in favor of greater protection of the competitors, on the other hand, the consumers may be in favor of the fact that it should promote competition for the welfare of the consumers.

In this way, it can be said that the provisions of Australian Consumer Law are equally important for the small businesses, particularly when they have the face the misuse of market power by large businesses. In such a case, the ACCC has the power to act in order to protect the small businesses. However, as mentioned above, the Commission does not protect a particular business due to the reason that it is a small business, but in order to protect competition, where a small business has to face anti-competitive behavior of a more powerful firm.

References

Battisti, M. (2009) Who Does What? Business Compliance in Small Firms, New Zealand Centre for SME Research, Massey University, online at:

Carpentier, C., L'Her, J-F. and Suret, J-M. (2008) ‘Does Securities Regulation Constrain Small Business Finance? An Empirical Analysis’, Small Business Economics, 31, 4, 363-377.

Chittenden, F. Kauser, S. and Poutziouris, P. (2002) Regulatory Burdens of Small Business: A Literature Review, online at:

Corneliussen, F. (2005) ‘The Impact of Regulations on Firms: A Study of the Biotech Industry’, Law and Policy, 27, 3, 429-449.

Cosh, A. and Hughes, A. (2003) ‘Innovation Activity: Outputs, Inputs, Intentions and Constraints’, in Cosh, A. and Hughes, A. (eds) Enterprise Challenged, University of Cambridge, Cambridge.

Johnson, S., Macmillan, J. and Woodruff, C. (2002) ‘Property Rights and Finance’, American Economic Review, 92, 5, 1335-1356.

Jones, T., Ram, M. and Edwards, P. (2006) ‘Ethnic Minority Business and the Employment of Illegal Immigrants’, Entrepreneurship and Regional Development, 18, 2, 133-150.

Kitching, J. (2007) ‘Is Less More? Better Regulation and the Small Enterprise’, in S. Weatherill (ed) Better Regulation, Hart, Oxford

Parker, S. (2007) ‘Law and the Economics of Entrepreneurship’, Comparative Labor Law & Policy Journal, 28, 4, 695-716.

van Stel, A. and Stunnenberg, V. (2006) ‘Linking Business Ownership and Perceived Administrative Complexity’, Journal of Small Business and Enterprise Development, 13, 1, 7-

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