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Why unfair competition is never good for business

On Behalf of | Aug 26, 2021 | Business Litigation |

No matter how you look at it, a business that strives to undermine its competitors is acting unethically and irresponsibly. There are many reasons why every industry in California should seek and eliminate acts of unfair competition.

Cases of unfair competition

Anticompetitive practices are designed to decrease the number of competitors in a market, sector or industry. The most common example is a monopoly in which a single company dominates an entire market. Standard Oil is the most infamous example of an American monopoly that dominated the oil industry in the early 20th century. The goal of a monopolist is to own all the businesses or promote one large company that has eliminated the rest of the competitors.

False advertising is the most common type of unfair competition. A company that cannot shut down its competitors can simply spread false rumors or lies about their products and services. Another example is stealing another company’s trade secrets and alleging that the information was acquired on one’s own. Business litigation does not focus mainly on prosecuting people who make fake ads, but criminal trade secret theft is a crime that carries severe penalties.

Preventative laws

Most governments have antitrust laws to prevent monopolies and promote competition among businesses. Every state has laws that vary in the levels of restrictions placed on companies. They prevent corporations from trying to engage in fraud, deceive consumers and eliminate or undermine other businesses.

The necessary ethics of business

In every industry, there must be fairness in the ways that businesses treat each other, their employees and their customers. American capitalism has a history of unfair competitive practices that include the rise of monopolies. Today, there are a good number of antitrust laws and business codes of ethics that encourage business owners to compete reasonably.