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Online trading raises legal questions for SMEs

Juliet Helmke
23 August 2021 1 minute readShare
Online trading raises legal questions for SMEs

The ACCC reported an increase in communications from small businesses during the first six months of the year, particularly relating to the rules around online trading.

Small businesses have been contacting the Australian Competition and Consumer Commission (ACCC) in record numbers this year. The ACCC reports small businesses have contacted them more than 3,500 times in the first six months of 2021, the highest number in the last two years.

A quarter of those communications are in relation to online business activity, according to the ACCC’s latest Small Business in Focus report.

ACCC deputy chair Mick Keogh said this year had seen many SMEs take their operations online due to COVID lockdown closures, and reminded small business operators that their rights and obligations under the Australian Consumer Law do not change in the online business environment.

“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,” Mr 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.”

The ACCC’s small business hub provides a range of advice on issues facing SMEs in 2021, including how to protect your organisation from cyber crime, which is also on the rise, according to the ACCC’s latest report.

Small businesses lost more than $5.3 million to scams between January and June 2021, the report showed, which is 31 per cent higher than in the previous six-month period. The ACCC’s Scamwatch received 978 reports from small businesses, who most commonly reported being targeted by false billing and phishing scams.

Questions fielded from small businesses in the past six months were also increasingly related to a number of changes to the Competition and Consumer Act that were introduced to benefit small businesses.

For example, recent amendments to the franchising code placed additional requirements on franchisors, making it illegal for a franchisor to change the terms of franchise agreement retrospectively without the consent of a franchisee. 

The ACCC also introduced a class exemption for collective bargaining in June of this year, which prompted calls from businesses clarifying the rules. 

The exemption allows eligible small businesses and farmers to collectively bargain with their suppliers and processors, franchisees to collectively negotiate with a franchisor, and fuel retailers to collectively negotiate with a fuel wholesaler.

“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.

Online trading raises legal questions for SMEs
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Juliet Helmke

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