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Small businesses want to restrain the market power of corporate capital

22 July 2018

Small businesses want to restrain the market power of corporate capital

Brussels is the paradise of market fundamentalism, which is why it's all the more striking that in recent weeks we have spent so much time in the European Parliament Internal Market Committee on intervening in the market to prevent the exploitation of small firms. There are thousands of examples of unfair practices by big corporations in their treatment of smaller companies. This gives me another reason to want to tackle dishonest trading methods, but as long as we fail to do something about market domination and recognise that corporations can be too big, we'll be mopping the floor without stopping the flood at its source.

As many as four reports have been produced on the unfair relations between many small firms and a few major corporations on which they are dependent. Sometimes it's a matter of farm businesses which deliver to a few supermarkets which think that they can unilaterally impose their will. In other cases, suppliers are forced to accept a settlement limit of of 90 or sometimes even 120 days, despite the law stating that the rule is 30, with the possibility of a 60-day extension. And recently we had the chain-store HEMA, where independent establishments – franchises – belonging to an investor who was looking to buy the company, would not be allowed to share in the proceeds from internet sales. Or, finally, there's the powerful position of internet platforms, such as in hotel reservations. They dictate the rules - and even major hotel chains have to dance to their tune.
 
I have met with numerous business people who work extremely hard to keep their own firms afloat. They feel responsible for their employees and for the quality of their products. But things really start to go awry when they become dependent on imposed one-sided contracts. One way of approaching this would be to limit freedom of contract. We're working on this, for instance in relation to internet platforms. In essence, however, this is to do no more than treat the symptoms. The actual flaw in European law lies in competition law. The Commission sees nothing wrong in a market dominated by a few firms, provided they don't abuse their position. But of course this doesn't work. It's time we took a critical look at the principles on which competition policy is based. In my view powerful corporations should be split up. That would save a lot of heartbreak.

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