An Overview of Unfair Competition Laws

Unfair competition laws consist of torts that may result in financial damage to a business, which often involve misleading or illegal practices. Here we will look at the basics of unfair competition and the laws that govern them.

First, unfair competition does not give reference to the monetary harms brought about by monopolies and antitrust laws. An act becomes unfair when it complies with the context of the business, the action being evaluated, and the facts surrounding the individual’s claims.

Here are some of the most common forms of unfair competition:

• Trademark Infringement - This action takes place when a person or an entity (the "infringer") uses a brand or product that resembles or is an exact look of trademark registered to another. In this case, a brand owner may pursue legal means directed against a party, which infringes its registration. In most countries, except in the United States, unregistered trademarks are exempted from infringement. At the same time, they cannot hold the infringer liable for trademark infringer. Rather than pursuing the case, one can sue the infringer for misrepresentation.

• Misappropriation - This is the deliberate, wrongful use of an estate to push for one’s own personal or unauthorized scheme. No misrepresentation occurs, however, if the financial reward came from rendering a service.

In scientific research, misappropriation is often considered a misdemeanor. Vital information derived by investigators, scholars, or reviewers from friends or colleagues are often subject to abuse. When information gathered from these sources is used improperly, the action becomes fraudulent.

Misappropriation of a trade secret is a federal crime under the1996 Economic Espionage Act. Unfair competition laws generally provide consumers and government regulators an avenue for launching legal actions.

In 1998, for example, a legal action was launched against Geocities for falsifying its aims for gathering data from visitors logging in to their website. Under the terms of the term agreement signed by representatives from Federal Trade Commission (FTC), Geocities gave their consensus to implement several things that the FTC cannot demand through direct regulation.

Two important facts were derived from this incident.

1. posting a privacy policy is always important although there are no existing laws that require privacy policies

2. the consent of parents must be obtained prior to gathering information from children

This incident took place prior to the implementation of the Children’s Online Privacy Protection Act, which was clearly a move by the FTC to regulate the usage of the Internet, a practice they continue to do until today.

Federal as well as various state governments has unfair competition policies in place to prevent businesses from resorting to illegal practices. Privacy policies are designed to protect personal information from being misrepresented. Unfair competition policies provide an additional tooth against firms that violate their privacy policies.

In cases when the economic playing field is no longer level, putting in place unfair competition legislation can give small businesses an opportunity to get even a small portion of the profit. With the Federal Trade Commission serving as watchdog, the days of companies using unfair labor practices are certainly numbered.

Unfair competition practices could affect your business and may eventually cause its downfall. Some of these practices violate provisions of the unfair competition laws. To know more about other business laws, you can log on to our official website and consult with our expert lawyers in the field.