What Constitutes Unfair Competition?

California business law can be very complicated territory, but having a skilled business litigation attorney to protect your company’s interests can be your ace in the hole. From legal definitions to requirements for lawsuits to statutes of limitations, this article is intended to help you identify and put a stop to unfair competition.

Unfair Competition Under California Law

According to California Business and Professions Code 17200, unfair competition is defined as “...any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising” and is strictly prohibited. Practices which fall under the scope of this law cover a broad spectrum, as a claim of unfair competition can potentially be raised if the practice either gives one business an unfair advantage against competing businesses, or if a business’s practice is causing harm to consumers.

Examples of violations of California’s Unfair Competition Law (UCL) include:

  • Intellectual property infringement
  • False advertising, including “bait and switch” tactics
  • Theft of a business’s customers list or trade secrets
  • Price manipulation
  • Falsely identifying a product as being affiliated with a more well-known company or entity

Keep in mind, not all of the “unfair, unlawful, fraudulent” criteria must be met in order for a case to be made for violation of the unfair competition law. For instance, even if a business practice is determined to be “unfair,” it does not necessarily mean the practice is “unlawful,” but can it can still be considered a violation of the UCL.

What Can Be Gained by Suing Successfully?

The penalties for violating the state’s law against unfair competition are notable, partially because there is no money awarded to the plaintiffs. Although punitive damages are not available, the following penalties may be administered:

  • Court injunctions to prevent the practice determined to be unfair, unlawful, or fraudulent
  • Recovery of any money the plaintiff paid to the defendant for services

Due to the lack of monetary rewards, many cases of unfair competition actually end up being grouped together as class action lawsuits against the business. In such a case, a local district attorney or the state Attorney General’s office brings legal action against a business on behalf of the public. In the event of a class action case, penalties can be severe, including criminal prosecution or fines for each individual violation.

In the state of California, the statute of limitations for filing a claim for unfair competition is four years from the discovery of the practice in question. That means that from the moment you discover unfair competition, you have four years to take legal action against the offending business.

What If My Business Is the Defendant?

If your business is the defendant in a legal action in which it is being accused of unfair business practices, retaining the services of an accomplished commercial litigation attorney is the best choice you can make. As a 45-year veteran of the California legal system focusing on business litigation, David H. Schwartz will provide you with sound legal counsel to help you and your business navigate these complicated situations.

How Can a Business Litigation Attorney Help?

When dealing with complicated business legalities in the state of California, experience can be an invaluable asset. San Francisco-based business litigation attorney David H. Schwartz focuses on helping clients navigate complex legal matters affecting their businesses, including defending businesses against unfair competition actions and helping businesses take action against competitors for unfair competition.

At the Law Offices of David H. Schwartz, you can be assured that you are receiving all of the knowledge David has accumulated over the course of a legal career spanning more than four decades. Your business is important to you, and you deserve the very best representation. If your San Francisco Bay Area business is needing defense against allegations of unfair business practices, you need to consult with an attorney to build your case. Call the Law Offices of David H. Schwartz today to schedule your consultation.


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