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What is the definition of unfair competition?

There are very few general rules when it comes to unfair competition. If your competitors are engaging in libel, stealing information from you or using deceptive advertising techniques, then you might have a case under the various unfair competition laws.

The main issue you would face in this type of case would be that organizations are often relatively creative when skirting the ethical boundaries of the open market. As a result, as explained by the Cornell Law School’s Legal Information Institute, exactly what might qualify for unfair competition typically depends on your case, the action in question and the general business context.

In some cases, the basis for an unfair competition suit comes from an action that injures consumers in addition to harming your business. Common examples include advertising false benefits or doing a bait and switch to get consumer attention. In these types of cases, you may have unexpected support from the FTC, as that body regulates some of these activities.

Other types of unfair competition cases are less likely to garner FTC support. For example, if a former employee stole secrets about your product when leaving the company and one of your competitors bought those secrets, this would probably not be an action that directly harms consumers. Cases such as these, including theft of trade secrets or corporate espionage, often find a venue in state courts, rather than at the federal level.

Of course, depending on the complexity of your case and the identity of the parties involved, your case could have a complicated future that involves various actions and appeals. Balancing the scope of your loss against the possible benefits of filing suit will likely be an important step when making your decision as to whether to pursue an unfair competition claim.