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Why Fair Competition Matters for Your Small Business

As a small business owner, you may have heard terms like “fair competition” and “antitrust” in the news or from policy organizations like ours. But what do these terms actually mean, and why do they matter to small businesses? To help you better understand what fair competition is, we’ve created this guide with helpful information, key terms and resources.

What is fair competition and antitrust?

Fair competition refers to the rules, policies and market conditions that prevent dominant companies from abusing their power to shut out smaller competitors. 

Antitrust refers to laws that help support fair competition by preventing the concentration of economic power and limiting abusive or predatory business practices. Their goal is to maintain healthy competition, not to shield individual businesses from efficient rivals, but to stop anti-competitive conduct that harms the market and makes it harder for small businesses to compete and thrive.

How can your small business be impacted?

While these terms might be new, many small businesses are already experiencing the effects of unfair competition in their day-to-day operations. From online marketplaces prioritizing their own products over independent sellers to rising supplier costs, unfair contract terms and large chains using their market power to undercut smaller competitors, these practices can make it harder for small businesses like yours to compete and grow.

These challenges can lead to higher prices and fewer choices for consumers, and create barriers to growth for local entrepreneurs trying to serve their communities. 

Our research shows small business owners are feeling increasingly squeezed by large corporations and unfair market practices. In fact, a study from 2022 shows more than half of small business owners say large companies have an unfair advantage in their industry or line of work. Additionally, 80% agree that large companies have too much control over markets and that the government should help create a more equitable playing field for small businesses.

What can you do?

While creating a more level playing field will require policy changes and stronger protections, there are still resources you can access to better understand and navigate fair competition issues. Access the Federal Trade Commission’s Competition Guidance to learn more about antitrust guidelines and unfair business practices, or explore our fact sheet to better understand how these issues can impact your small business.

If you suspect anti-competitive behavior such as price fixing, monopolistic practices or unfair market conduct, visit the U.S. Department of Justice Antitrust Division Complaint Center to report potential violations. Even if you don’t have a specific instance to report, supporting local policy efforts and making your voice heard can help advocate for stronger protections and create a more equitable business environment for Main Street.

Key terms

Fair competition A marketplace where businesses compete on equal footing—without manipulation, coercion or unfair advantages that distort outcomes.
Market concentration When a small number of large firms control most of a market. High concentration can limit choices, raise prices and squeeze out small businesses.
Non-compete agreement A legal contract between an employer and an employee that restricts the employee from working for or starting a competing business for a certain period of time after leaving a job.
Monopoly A single company dominates an entire market, giving it power to control prices and exclude competitors.
Oligopoly A market dominated by a few large firms that can influence prices and market conditions.
Antitrust laws Regulations to prevent the concentration of economic power and abusive or predatory practices. The main goal is to maintain healthy competition, not to shield individual businesses from efficient rivals, but to stop anti-competitive conduct that harms the market.
Self-preferencing When an online marketplace/platform favors its own products or service over competitors.
Price fixing When competing companies secretly agree to set prices at a certain level instead of competing—illegal under antitrust law.
Price discrimination A business strategy where larger companies/sellers charge different prices for the same product or service to different buyers. 
Dynamic pricing The ability to fluctuate pricing based on market factors.
Surge pricing When prices increase temporarily because of changes in supply and demand. The company raises prices broadly for everyone in a certain place or time because demand is high or supply is limited.
Market pricing The natural outcome of free competition.
Algorithmic price fixing When companies use AI algorithms to automatically set prices. These systems end up coordinating with each other, so prices stay high instead of competing, creating a technology-based price fixing scheme that antitrust laws have not caught up with.
Surveillance pricing A pricing strategy where companies use large amounts of personal data about consumers to determine what price to charge different people for the same product or service.