Competition is essential in business because it helps consumers have a choice and drives businesses to keep improving and expanding. It helps to keep the economy moving and ensures that people have access to a variety of services and products.
However, in some situations, competition becomes unfair. According to California Legislative Information, the Busines and Professions Code contains specific language banning unfair competition.
Getting ahead the wrong way
Unfair competition typically involves any business that uses illegal means to help it get ahead of its competitors or that uses false information when selling to consumers. This might include fraudulent actions or misleading advertising. By banning these practices, it helps to keep the business world honest and prevents tactics that aim to fool or trick consumers.
The federal government also has bans on unfair business competition. According to Cornell Law School, federal law breaks it down into unfair competition and unfair trade practices, which both fall under the state law umbrella.
Unfair competition at the federal level includes any practice by a business to confuse consumers. This might be violating intellectual property rights by using a trademark illegally or use bait and switch sales tactics.
Unfair trade practices cover anything that falls outside of unfair competition. However, it does not include acts such as creating a monopoly, which falls under other business laws. In fact, for the most part, both state and federal unfair business competition laws often intermingle with other laws, making them rather complex. In any case, though, this also strengthens the laws because they are much clearer and easier to uphold.