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Keith - Just a small piece on "Unfair Competition"
Unfair Competition law: an overview
The law of unfair competition is primarily comprised of torts that cause an economic injury to a business through a deceptive or wrongful business practice. Unfair competition can be broken down into two broad categories. First, the term "unfair competition" is sometimes used to refer only to those torts that are meant to confuse consumers as to the source of the product. The other category, "unfair trade practices", comprises all other forms of unfair competition.
Unfair competition does not refer to the economic harms involving monopolies and antitrust legislation. What constitutes an "unfair" act varies with the context of the business, the action being examined, and the facts of the individual case.
Two common examples of unfair competition are trademark infringement and misappropriation. The latter involves the unauthorized use of an intangible assets not protected by trademark or copyright laws. See also Right of Publicity. Other practices that fall into the area of unfair competition include: false advertising, "bait and switch" selling tactics, unauthorized substitution of one brand of goods for another, use of confidential information by former employee to solicit customers, theft of trade secrets, breach of a restrictive covenant, trade libel, and false representation of products or services.
The Competition Act 1998 and Article 82 the EC Treaty incorporated in British law by the European Communities Act 1972 prohibit the abuse of a dominant position.
A dominant position in competition law refers to a situation where an enterprise is not constrained by competition. This might be, for example:
• A monopoly (e.g. a water company).
• A dominant position in a local market, if buyers will not travel long distances (e.g. for funeral services).
• A dominant position in supplying spare parts or intellectual property licenses, even if there is effective competition for the main product (e.g. a car maker).
• A discretionary power to determine who is allowed to supply in a market (e.g. on safety grounds).
Abuse of a dominant position is the misuse of the power associated with a dominant position. Examples include:
• Ceasing to provide services which have no effective substitute (including constructive denial through unfair prices) in a way that excludes competitors.
• Using a dominant position to exclude competitors, e.g. through predatory targeting of special offers.
• As a dominant supplier to a trade, setting prices and terms that place some customers or types of customers at a competitive disadvantage.
• Exploiting abnormal restrictions on competition, e.g. high prices that take advantage of illegal activity.
This does not mean that businesses do not have the right to choose their trading partners, to compete on price or capacity, to offer different prices to different customers, or to extract rents or profits. But those who hold a dominant position have a special responsibility not to use their dominant position for an improper purpose, or to use their power beyond what is needed for legitimate purposes.
Roger
