It’s common for business stakeholders to consider their business competition to be a bit like a war. And, as the saying goes, “all’s fair in love and war.” That is, in fact, not the case regarding interactions with your competitors. Going too far can lead to unpleasant legal consequences.
Recognizing possible unfair tactics
The fine line between aggressive competition and violation of the law is subtle. However, some classic examples can help you realize if your strategies go too far, including:
- False advertising
- Trademark violation
- Stealing trade secrets
- False guarantees or warranties
Essentially, the law prohibits a company from bending the truth the gain an edge. However, an aggressive advertising campaign that highlights the benefits of your company, as well as maintaining a strong presence in the marketplace, is not a violation.
Still, just because you’re careful doesn’t mean you can’t face litigation.
Consequences of unfair practices
Facing an accusation of unfair competitive tactics is a significant legal risk. You may face many possible penalties if a court finds that you have gone too far. Those remedies may include:
- Monetary damages: California’s law specifically includes a $2500 penalty per violation, which would be added to any damages the court awards.
- Injunctions: In many cases, a court will order you to cease the activity seen as unfair competition.
However, before facing those consequences, the plaintiff must prove that your company committed the violations. That is challenging. Further, trademark infringement can seem cut and dried to many, the legal reality is quite complex. There is a long way to go in court for anyone to face a negative outcome.