Fair competition is important to businesses. Competitors help drive innovation and can serve as motivation for employees to do the best work possible. Multiple businesses operating in the same industry and region often help bring out the best in one another.
Unfortunately, some companies engage in forms of competition that are unfair and even outright illegal. Occasionally, one business may need to take legal action against another for unfair business practices that interfere with the organization’s ability to compete profitably.
What types of business conduct might warrant allegations of unfair competition and a decision to take legal action?
Price fixing schemes
Sometimes, multiple competitors dislike a business that may have become quite popular with local consumers. They may agree to try to push that business out of the market by manipulating consumers by setting lower prices than that competitor. Attempting to manipulate the market by committing to specific pricing models could be a price-fixing scheme. By undercutting the market temporarily, competitors can potentially drive one business out of the local market. Any proof of price fixing could lead to a lawsuit initiated by the company affected.
Corporate espionage
Sometimes, what gives one business a competitive advantage is information not readily available to the public. Trade secrets can include vendor lists, recipes and proprietary production processes. Some companies engage in corporate espionage ranging from burglary to attempts to infiltrate the organization with a new hire employee. Corporate espionage can lead to a competitor acquiring crucial trade secrets and using them to diminish another organization’s competitive advantage.
Online defamation
Another way that competitors can damage a business is by maligning the company to the public. Doing so has never been easier than it has become since the rise of social media and review websites. Competitors can pretend to be customers or clients and leave negative reviews. They can make completely falsified allegations to damage the company’s reputation with potential customers or future employees. In some cases, they may go so far as to create multiple fake accounts or usernames to drag down the average score for a competing business and deter customers from patronizing the company.
Attempts at unfair competition may require a business lawsuit to resolve the matter. Successful litigation can lead to a court injunction preventing future misconduct and may even result in compensation for damages in some cases.
