Antitrust laws fall into a broad category of United States federal laws which regulate business enterprises. Antitrust laws attempt to prevent monopolistic business activities and strive to promote a free market economy which provides consumers with reasonable amounts of choices in:
- Services; and
What is an Antitrust Violation?
There are numerous ways a business enterprise may be in violation of antitrust laws. A court will examine the possible antitrust violations under a standard of per se violations.
Pursuant to this practice, all that is required to be shown in court is that the accused actually committed one of several per se violations. It is important to note that the accused individual or entity’s intent is not relevant nor are the effects of their actions.
Notable antitrust per se violations include:
- Lockup agreements;
- Concerted refusals to deal; and
- Mergers in which a major, as well as the only, competitor is dissolved.
What is Unfair Competition?
Unfair competition is an area of antitrust and trade regulation which deals with dishonest or fraudulent rivalry in commerce and trade, also referred to as deceptive trade practices.
Common examples of deceptive trade practices include:
- False advertising;
- Passing off;
- Commercial disparagement; and
LegalMatch articles discussing antitrust and trade regulation include:
- What Is Antitrust Law?;
- What Is Trade Regulation?;
- The Sherman Antitrust Act;
- The Clayton Act of 1914;
- The Robinson-Patman Act; and
- The Cartwright Act.
LegalMatch articles discussing consumer protection, consumer fraud, and false advertising include:
- What Do Consumer Protection Laws Cover?;
- What Is the Fair Packaging and Labeling Act?;
- What Constitutes Consumer Fraud?;
- What Constitutes False Advertising?; and
- What Is Franchise Fraud?.
LegalMatch articles discussing the Federal Trade Commission (FTC) include:
- What Is The Federal Trade Commission?;
- What Is The Federal Trade Commission Act?;
- The Fair Credit Reporting Act;
- The Fair Credit Billing Act; and
- The Federal Trade Commission Cooling-Off Rule.
What Are Some Common Competition Law Disputes?
Competition laws were enacted to ensure that one single company does not dominate the entire field or industry of operation. In other words, to prevent monopolies from forming.
Therefore, numerous competition laws involve disputes which are related to companies driving their competition out of business and related issues.
Common competition law legal disputes include, but are not limited to:
- Various business sales and marketing violations, for example, false advertising and bait and switch;
- Misrepresentation when dealing with consumers or other business entities;
- Contracts which limit one party from participating freely in the market; and
- Various types of conduct that fall under the category of unfair competition, for example, using illegal business tactics or methods.
What is an Unfair Competition Lawsuit?
The number of unfair competitions lawsuits which are filed against businesses have risen in recent years. With each lawsuit, the definition of what constitutes unfair competition is expanded.
Examples of business practices which commonly result in unfair competition lawsuits include:
- Misrepresentations to consumers;
- Discriminatory treatment of consumers;
- Advertisements expressing hostile treatment of competitors; and
- Unreasonable non-compete clauses in employment contracts.
What Constitutes Unfair Competition?
State laws and federal laws address what constitutes unfair competition differently. In many states, the unfair competition laws are considered to be plaintiff friendly, meaning that nearly any business action may be considered unfair competition.
Because of this, many state courts use a rule of reason analysis. Using this analysis, the court examines the motives of the defendant as well as the utility of their conduct and weighs it against the gravity of harm to the plaintiff.
Federal laws, on the other hand, consider a business practice to be unfair “when it offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.”
Are There Any Remedies Available under Competition Laws?
Yes, business competitions acts and laws provide a wide range of legal remedies for a competition violation, depending on the type of violation which is involved. Common remedies available for competition violations include:
- Damages awards, especially special damages which are awarded to compensate for damage to business reputation;
- Cease and desist orders, which are court-sanctioned orders instructing one business entity to stop performing a certain act, typically in connection with intellectual property usage; and
- Various contract remedies, for example, an injunction instructing one company to perform a certain act that they are otherwise refusing to do.
A competition lawsuit may have multiple plaintiffs. For example, a lawsuit may affect a large group of consumers or it may involve multiple businesses.
In these cases, it may require the lawsuit to be filed as a class action.
What Are Unfair Trade Practices?
An unfair trade practice is a practice that an individual or a company engages in to obtain business that is:
- Misleading; or
Unfair trade practices can be targeted at consumers or rival businesses.
What Are the Types of Unfair Trade Practices?
Unfair trade practices include any business actions which are made illegal by law, including:
- False advertising;
- Selling tactics; and
- Deceptive trade practices.
What Are Deceptive Business Practices?
Any activity which an individual or business engages in that is likely to deceive the public may be considered a deceptive trade practice. Deceptive trade practices are prohibited because of the adverse effects they have on consumers and on the general public.
State and federal regulations restrict the use of deceptive trade practices. The Uniform Deceptive Trade Practices Act (UDTPA) is one example of federal legislation which regulates misleading trade practices.
Every state has adopted some form of the UDTPA in their statutes. In addition, the Federal Trade Commission Act oversees deceptive trade practices.
- Deceptive trade practice laws govern a wide range of business elements, including:
- Trade & commerce;
- Consumer transactions; and
- Goods & services.
An individual or a business engages in a deceptive business practice when they are involved in any business activity which may mislead the public. Examples of deceptive practices may include passing off fake goods as the real thing or causing disorder and misunderstanding regarding the approval of the goods and services.
What is California’s Unfair Competition Act?
California‘s Unfair Competition Act outlines numerous business practices which are considered unfair trade practices and are, therefore, illegal. Such illegal practices include:
- False, misleading, or unfair advertising;
- Unlawful business acts or practices;
- Unfair business acts or practices; and
- Fraudulent business acts or practices.
What Are the Penalties for Violating California’s Unfair Competition Act?
A violation of the California Unfair Competition Act will be prosecuted by the California Attorney general. However, a private attorney may also file a lawsuit for an alleged violation of the Act.
If the California Attorney General prosecutes the violation and the defendant is convicted, they will face a fine of $2,500 for each violation. If a private party alleges there was a violation of the California Unfair Competition Act, the only remedies that will be available include restitution and injunctive relief.
Restitution is a type of damages where a court orders a defendant to return money that it made through the unlawful practice to the victim who was treated unfairly. An injunction is a court order which requires the defendant to cease engaging in unlawful business practice.
Do I Need a Lawyer for My Unfair Competition Act Problem?
Antitrust and unfair competition laws can be very complex. It may be helpful to consult with a California business lawyer who will be able to help guide you through the legal process and ensure that all of your rights are protected.