What is unfair competition?

| Mar 2, 2021 | Firm News

One of the first life lessons we’re taught is to play fairly. One of the first excuses we’re given is that life isn’t fair. Businesses tend to occupy the crossroads of these two contradictory viewpoints. On the one hand, a business often succeeds because it has a competitive edge. On the other hand, ethical guidelines should drive a business’s decision-making process.

The business world is often cut-throat. The idea of “share and share alike” generally doesn’t exist in our economic system. That said, it’s expected that businesses will play by certain rules in the marketplace. When a business’s actions cross a competitive line, it may be unfair competition. Unfair competition is not a mere philosophical conceit. It’s enforced by law.

What does unfair competition look like?

In general, acts of unfair competition are defined by deception, fraud, or bad faith. Acts of unfair competition can be directed towards other businesses or consumers. Deceptive trade practices can harm one company’s revenue. False advertising or false claims could mislead consumers. Some of the more common examples of unfair competition include:

  • Trademark infringement: A business that uses another company’s trademark without permission is committing trademark infringement. For example, using the Pepsi logo on an unrelated brand of soda.
  • False advertising: A business should refrain from making claims about a product that is false or untrue. Doing so could result in a charge of false advertising.
  • Misappropriating trade secrets: Standing out from the competition is a key component of any company’s success. If an employee makes off with trade secrets, such as the recipe for Coca-Cola, a company loses the very thing that makes it unique.

There are numerous other examples of unfair competition. Depending on the situation, an act of unfair competition may run afoul of state or federal law, or both. It’s important that you discuss any concerns with a skilled legal professional. Together, you can address or defend against claims of unfair competition.