Small business contacts continue to rise during pandemic

20 August 2021

The ACCC received over 3,500 contacts from small businesses in the first six months of this year, the highest number of contacts in the last two years.  

The ACCC’s latest Small Business in Focus report, released today, highlights the ACCC’s work from January to June 2021 in the small business, franchising and agriculture sectors.

The report shows that approximately one quarter of all small business contacts to the ACCC are about online business activity.

“Given the difficult operating environment for many this year, it’s not surprising that many small businesses are contacting the ACCC to ask about their legal rights and responsibilities,” ACCC Deputy Chair Mick Keogh said.

“The ACCC has developed new guidance specifically for businesses that are operating online, to help them understand their rights when dealing with other businesses and their responsibilities to consumers.”

In the first six months of this year, the ACCC undertook a range of enforcement action in the small business, franchising and agriculture sectors.

In March, Adventium paid approximately $6.5 million of previously withheld payments to over 350 Australian tour operators following an ACCC investigation. In May, the Federal Court ordered Jump Swim (in liquidation) to pay penalties of $23 million for making false or misleading representations and wrongly accepting payments from franchisees, in proceedings brought by the ACCC.

The ACCC also continued its focus on compliance with the Dairy Code, with one processor receiving an infringement notice, and court proceedings commencing against a second processor.

The report also highlights a number of changes to the Competition and Consumer Act in the last six months that will benefit small businesses and franchisees.

A new collective bargaining class exemption allows eligible small businesses and farmers to collectively bargain with their suppliers and processors, eligible franchisees to collectively negotiate with a franchisor, and eligible fuel retailers to collectively negotiate with a fuel wholesaler.

Recent Franchising Code amendments place additional disclosure requirements on franchisors, make it illegal for a franchisor to change terms in a franchise agreement that apply retrospectively without a franchisee’s consent, and provide more dispute resolution options.

“We know that changes to the law are not always easy for people to put into action, so we are working very hard to get information to small businesses and franchises so they understand what the changes mean for them,” Mr Keogh said.

The report also reveals that small businesses lost more than $5.3 million to scams between January and June 2021, which is 31 per cent higher than the previous six month period. Scamwatch received 978 reports from small businesses, and false billing and phishing scams were most commonly reported.

Background

A growing number of businesses are choosing to start or expand online. It is important to understand that their rights and obligations under the Australian Consumer Law do not change in the online business environment.

We have developed guidance for any small business who may be starting up online or already have an online presence. Videos and cases studies are available at Your rights & responsibilities as a business online.

The Small Business in Focus report is published twice yearly and provides a summary of the ACCC’s work and activities in the small business, franchising, and agriculture sectors.

The ACCC has also published a range of resources to support small businesses that are available at Small Business.

Release number: 
130/21
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