Over a quarter of the Midlands' small and medium sized enterprises believe they are harmed by unfair practices such as cartels, price fixing and collusion to set tender prices.
New research from the Office of Fair Trading (OFT) found that 30 per cent of SMEs in the Midlands are aware of anti-competitive activities in their industries and 23 per cent feel they have been a victim of anti- competitive behaviour.
The OFT is calling on SMEs to recognise anti-competitive practices in their markets and work with them to take action against companies who break competition law.
Despite the apparent high awareness of anti-competitive behaviour, only 18 per cent of SMEs in the Midlands said that they would report pricefixing agreements between competitors.
Just two per cent would report a larger competitor trying to push them out of the market by cutting its prices to below cost
This may suggest that SMEs are missing out on the benefits of fair and competitive markets.
Over half of businesses in the Midlands felt that the industry in which they operate could increase its competitiveness and 35 per cent thought that new companies have difficulty entering markets.
Around 16 per cent of companies actually felt that they could not compete freely and fairly for new contracts.
Sir John Vickers, OFT chairman, said: "Practices such as price-fixing and bidrigging harm the competitiveness of our economy.
"SMEs have rights and obligations under competition law and can work more with the OFT to identify and stop anti-competitive behaviour.
"We must ensure that SMEs are informed about - and in turn inform - our work."
During April the OFT launched the 'Championing Competition' campaign to promote the benefits of competition to SMEs and to raise awareness of their rights and responsibilities under competition legislation to help businesses avoid anti-competitive behaviour in their markets.
Prof David Storey, director of the Centre for SMEs at Warwick Business School - who is writing a report for the OFT on SMEs and competition - said: "What is interesting is that even when they experience anti-competitive practices, the reaction of the small firm owner is to soldier on without turning to the authorities.
"But using their rights under competition laws they can level the playing field to give them a better chance to beat the competition."