But Little stresses that the tools are available if you have been wronged.
“You can run personal proceedings against a company found to be involved in cartel conduct,” he says. “You will still have to prove that you suffered a loss due to the cartel.”
“These cases often run as class actions, as they make it more affordable for the businesses involved.”
Battling against the odds
Tony Faure, chairman of Lasttix, would not comment on the Ticketek case. But he is no stranger to challenging market dominance, having been involved in the launch of businesses such as iSelect, Seek and CarSales.com.au.
“Any category that you go into to disrupt, usually with a web model, will see the incumbent use their market power – you have to expect this,” he says.
“With iSelect, Seek and CarSales.com.au, we were clearly threatening the way things were done before. The newspapers didn’t like CarSales, as they thought they’d lose advertising revenue, for example.”
“Incumbents will use any tool they can to protect their market share. If they are concerned, this usually suggests that you are going about things in the right way. It’s a good sign. But you may want to stay under the radar for as long as possible.”
According to Faure, there are common tactics used by large businesses that feel their position is under threat.
“Typically, if you offer something in return for revenue, the large business will offer it for free,” he explains.
“That’s what Fairfax did in response to CarSales – they bundled online and print advertising together for the same price. You risk losing out because the incumbents have more margin to play with. They can afford to take that hit.”
“They will also use industry opinion and research to scare people off your business. They can bring together vested interests to put pressure on you.”
So what should start-ups do in response to this?
“Your business needs a clear value proposition,” Faure advises. “You need to be clear and bold about what you offer and why it is different to the rest of the market.”
“Get into a positive loop by thinking about your own business and customers. Don’t spend your time thinking what a disaster it would be if the competition gets its act together.”
“You can’t outmuscle or outspend your big rivals, so don’t start offering lots of things for free. Demonstrate why you offer more value and do what you do well. Don’t be spooked.”
“Ultimately, if a competitor wipes you out, you’ve got the wrong business model. Almost always, incumbents aren’t good at disrupting themselves.”
“In 1996, News Ltd and Fairfax could’ve run away with the classifieds market – they had the relationships and the business model, but it’s hard to disrupt yourself.”
