The Equality Commission took a shop owner to court after staff told an Indian woman to leave because she was rude.
Stuart Dawson said he went through a 14-month ordeal after being accused of racial and sexual discrimination.
The case was thrown out by a judge earlier this week.
It has fuelled claims that the Equality Commission is waging a campaign of "torture" against business owners.
The body is currently taking legal action against a company which refused to bake a cake celebrating gay marriage.
Mr Dawson told the Belfast Telegraph: "The store has been trading here for eight years and nothing like this has ever happened before.
"We are a family business that welcomes all members of the community with open arms." The incident occurred last September when the woman arrived at his O2 franchise shop, Ruscom Ltd, in Bangor for an appointment.
Mr Dawson (42) said: "She told us that she had made an appointment to speak to one of our O2 gurus. It became apparent that she had came to our store by mistake and had actually made the appointment with another store.
"The store was quite busy and the sales people were already dealing with customers so they asked her if she minded waiting to be served. She told us she had another appointment in Belfast she had to get to.
"She seemed to be in a bit of a rush. She became very impatient and raised her voice at the staff. The manager then stepped in and asked her to leave.
"She said we were treating her that way because she was a single Indian woman in the shop on her own."
The woman complained to O2, who found no fault with the store's conduct. However, the case was subsequently taken up by the Equality Commission. The case was heard at Newtownards County Court, where it was dismissed by district judge Ruth Collins.
The Equality Commission said it proceeded with the case because it was "likely" that the woman had experienced discrimination on the grounds of her race.
However, Mr Dawson said there was no reason at all to support her claims that she had been treated unfairly. His solicitor John Gibbons attacked the Equality Commission's pursuit of the case.
"My clients were amazed at the allegation that they had treated their customer in a racist or sexist way, which they robustly denied," he said. "It is intimidating to be threatened with litigation by a body such as the Equality Commission, with all its resources.
"We prepared the case to fight them all the way and thankfully were fully vindicated by the outcome, when the district judge dismissed the claim. I'm sure most people would think the commission have better things to be doing than torturing small business owners with this type of thing."
The Equality Commission said it supported the case "as it considered it likely that the plaintiff had experienced discriminatory treatment on grounds of her race".
It added: "The commission has an important role in ensuring effective application of Northern Ireland's equality laws and supports cases so that people are aware of, and can avail of, the protection these laws afford against all forms of unlawful discrimination.
"The commission also provides support to employers and service providers to assist them to comply with their responsibilities under equality legislation."
The commission said its decision to support the case "took account of all relevant information" including correspondence between the parties and legal advice.
"In these circumstances, ECNI considered there were reasonable prospects of success," it added.