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The Albanese government will extend unfair trading practice protections for small businesses.
Labor government pledges to extend small business protections
18 March 2025
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7 minute read
The changes aim to address a “significant gap” in legal protections for small businesses who face unequal bargaining power when dealing with large companies, according to a government media release.
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“Small businesses are vital to our economy, and we’re concerned about the disadvantages they face when dealing with unfair practices from larger players that might not breach existing laws but still cause harm,” Julie Collins, Minister for Small Business, said.
“We’ve heard from various sectors including farmers, subcontractors, and small online retailers about challenging practices they’ve encountered. That’s why we’re moving forward with plans to extend these important protections.”
Labor hopes to crack down on large businesses that have used their outsized bargaining power to pressure small suppliers into accepting unfavourable contract terms, avoid contractually entitled price increases, and discourage small businesses from exercising their legal rights by threatening commercial consequences.
The protections were welcomed by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), which said the changes would reassure small businesses that they can invest, innovate, take risks and compete without being treated unfairly by large businesses.
“Sadly, too many of the more than 50,000 small businesses ASBFEO has assisted with dispute resolution and business concerns have been real-life cases where another business with more power has done harmful things to a small business, simply because they could,” Ombudsman Bruce Billson said.
“Unfair contract terms protections have helped to stop small businesses being fitted up with harmful, appallingly one-sided contract terms a bigger, more powerful business insists upon to simply reinforce its commercial muscle,” he added.
“What has been missing is a similar protection addressing harmful conduct and dealings which are all stacked against a small business, with no legitimate business justification, that amplify and exploit a power imbalance and harm the small business.”
The legislation will also target online platforms that make significant account changes with limited notice or without a transparent process, which affects Australian small businesses that retail online.
“Too often, small businesses – including farmers and suppliers – get strong‑armed by bigger players who rewrite the rules to suit themselves,” Andrew Leigh, Assistant Minister for Competition, Charities and Treasury, said.
“That’s why we’re cracking down on unfair trading practices. A supermarket shouldn’t be able to drop a supplier just for asking for a fair price. A dominant firm shouldn’t get to ‘negotiate’ by holding all the cards and stacking the deck.
“When competition turns into coercion, it’s not competition at all.”
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