Examples from other states

The following paragraphs highlight critical aspects of the competition laws in these jurisdictions that impact MSMEs.

Australia’s competition law applies to MSMEs without any provision for exemption or exclusion based only on the size of the business. Australia’s law allows for an MSME (or a collection of MSMEs, perhaps through their trade association) to approach the ACCC for approval of agreements or conduct on the basis that there is minimal harm to competition or that the public benefit outweighs any harm to competition. More recently, the ACCC has approved a collective bargaining class exemption which, when available, will allow MSMEs to collectively bargain (as a group) without fear of infringing competition law.

The ACCC recognises that MSMEs comprise more than 97 per cent of all businesses in Australia and treat them as a crucial stakeholder. The ACCC consults at least twice per year with the Small Business and Franchising Consultative Committee and publishes a Small Business in Focus publication (twice a year), which highlights the work of the ACCC that is relevant to MSMEs.

Competition law in Fiji also applies to all businesses without any exemptions or exclusions based only on size. Like Australia, Fiji has a formal authorisation process that is available to MSMEs. As MSMEs do not have access to legal advice about this formal process, MSMEs' informal approach to collaborations has been implemented by the FCCC during the Covid- 19 pandemic as a continuation of its practice in relation to MSMEs. For specific provisions of the Fiji competition law, MSMEs are treated as consumers rather than as businesses, typically to protect them from predators or harmful behaviour from larger enterprises. Although MSMEs have been found to have infringed competition law in Fiji, the FCCC has approached law enforcement from the perspective of education and awareness-raising. MSMEs who have violated competition law must attend a free training programme conducted by the FCCC to ensure that the business is educated on what is and is not permitted by the law. The philosophy is to ensure that micro and small businesses grow into compliant medium and larger companies.

Hong Kong, China
Despite solid lobbying for MSMEs to be exempt from Hong Kong’s competition law, the competition law applies to all businesses in Hong Kong, China. The Hong Kong Competition Commission (HKCC) has taken a proactive approach to engage with its MSME community, including publishing brochures explicitly targeted at this group, such as “The Competition Ordinance and SMEs” and  “How to comply with the Competition Ordinance: Practical Compliance Tools for Small and Medium-sized Enterprises”, among others.

The competition law in India does not distinguish between different types of economic entities. The Act applies to all enterprises, and this term is defined widely (see section 2(h)). MSMEs are covered under section 2(h) of the Act. The statutory mandate of the CCI requires it to consider various socio-economic aspects mentioned in section 19(4)(k) of the Act when investigating competition breaches; generally, the CCI takes the view that MSMEs are a relevant consideration. Mergers between MSMEs will not be generally scrutinised under the Act as the thresholds will not be met. The CCI has also treated MSMEs as a significant constituency when formulating its competition advocacy initiatives. Regarding competition enforcement actions against MSMEs, Section 27 of the Act gives the CCI a discretionary mandate. The CCI has taken into account the ability of MSMEs to pay a fine when determining enforcement actions.

A best practice example of competition legislation is Singapore’s Competition Act  which prohibits the following three main activities:

  • agreements which have as their object or effect the prevention, restriction or distortion of competition in Singapore;
  • conduct which amounts to the abuse of a dominant position in any market in Singapore; and
  • mergers that have resulted or may be expected to result in a substantial lessening of competition within any market in Singapore for goods and services.