Unfair competition

Deceptive conduct

In the business world, competition between companies should take place fairly and in full respect of the rules; in other words, it should be honest and fair.

In everyday practice, however, unfair and unjust behaviour occurs that causes harm and damage to businesses. By behaving unfairly, an organization can cause very serious damage to another, even an irreparable one. If you don’t play by the rules of the game, you put yourself in an advantageous position over your direct competitors, grabbing more customers and unfairly gaining more market share in the segment or sector in which you operate.

The misconduct and wrongdoing concerned are of the most varied nature and may have an external origin (i.e. they may be committed by parties outside of the aggrieved company, belonging to or traceable to 'competitors'), or internal (shareholders, directors, managers, employees of the same company). With reference to this last point, it should be emphasised that most threats affecting companies have an inhouse origin.

To simplify, it can be said that any act contrary to the principles of professional correctness that causes damage to a competitor constitutes unfair competition. The unfair techniques and practices that fall under the heading of unfair competition are varied and numerous:

With reference to unfair conduct originating from the outside, just think of all those cases in which a company publishes defamatory content online or spreads false news about the products of one of its direct competitors for the sole purpose of discrediting it and causing it harm; or when the former puts an item on the market by copying out the distinctive signs (trademark, logo, insignia) of a competitor, legally registered and for which it has not been given permission to market. The faithful imitation of a rival company's products is intended to create confusion on the market, causing damage not only to the aggrieved company but to all consumers. In fact, it must be remembered that this type of unlawful act harms not only the entrepreneur but also all the customers who come into contact with these products or services and who are deprived of the possibility of receiving correct and honest information, so that they can make a free and informed choice of the product or service they need.

Think also of the unfair practice of dumping, i.e. the sale by a company of its products at an extremely low price, carried out with the sole purpose of eliminating competition; or again of the transfer of employees, i.e. the practice of convincing the employees of a direct competitor to resign and then being hired by the unfair player for the sole purpose of harming the rival company in order to obtain confidential internal information of which those employees had become aware due to their working relationship with the former.

With regard to unfair behaviour from within, on the other hand, think for instance of industrial sabotage, which occurs when one or more employees sabotage machinery, forcibly stopping the manufacturing process with the aim of causing enormous damage to the company. Or those cases in which one of the partners sets up his own business in the same product segment as the company in which he/she is a partner, registering it in the name of one or more nominees, causing considerable damage to the partners who may be unaware of everything.

Think also of the violation of non-competition agreements, i.e. those pacts whereby the former employee of a company undertakes, under certain conditions, not to engage in competitive activities with respect to the former employer, but then does not respect them. Or to the most serious cases of industrial espionage, when valuable industrial secrets and highly confidential information are stolen by means of hidden bugs and recorders strategically placed in company premises where the most important decisions are taken (meeting rooms, managers' offices, etc.) or by means of abusive access to company computer systems. The cases concerned are truly boundless.

In essence, all these techniques and malpractices, although different from each other, share the same purpose of causing substantial damage to the targeted company.

The above should lead the company to study an intervention plan to be adopted in the event it suffers such misconduct. With this in mind, envisaging the use of investigators allows the offended company to reconstruct what happened, to gather evidence of the wrongful acts perpetrated to its detriment, and to identify the perpetrators (direct competitors, unfaithful partners, employees, former employees or collaborators, managers)

Offended companies will always be able to protect themselves by taking legal action both to stop such misconduct in order to stem as far as possible its negative consequences and to claim compensation for the damages suffered.

Such investigations can also be requested and acted upon at a stage prior to the occurrence of the damaging events, so as to help companies prevent serious and irreparable damage.