In this chapter, we consider the impact of per se laws on small and mediumsized enterprises (SMEs). Drawing on Australia's unusual adjudication/ enforcement model, we assess SMEs’ use of legitimate mechanisms designed to avoid overreach of the per se prohibitions, as well as the enforcement of those prohibitions against SMEs. These measures provide a basis for comparing compliance and non-compliance by small business and their larger counterparts.

Our analysis demonstrates that SMEs hardly ever attract regulatory attention for potentially lessening competition. Yet, in Australia, they feature in almost 50 per cent of per se proceedings, and are responsible for almost 80 per cent of matters resolved via (non-judicial) undertakings. At the same time, SMEs are under-represented as users of Australia's statutory immunity processes. These factors combine to suggest that per se prohibitions impose a competitive hindrance which disproportionately affects SMEs as against larger businesses.

In designing competition laws, therefore, one must be wary of an overzealous approach to per se prohibitions. If, as the Australian experience suggests, there is little or no prospect that conduct by SMEs will give rise to a “pernicious effect on competition”, then the law should be slow to impose conclusive presumptions to the contrary.

“The true test of legality is whether the restraint imposed is such as merely regulates and perhaps promotes competition or whether it is such as may suppress or even destroy competition.” (Justice Brandeis, Chicago Board of Trade vs United States 1918)

The rationale for per se rules is to avoid a burdensome inquiry into actual market conditions in situations where the likelihood of anticompetitive conduct is so great as to render unjustified the costs of determining whether the particular case at bar involves anticompetitive conduct (Jefferson Parish Hospital District No. 2 vs Hyde 1984).