Competition is generally seen as beneficial for consumers, businesses and the economy as a whole. It would encourage innovation and lead to better quality products and services and lower prices.
Competition is therefore encouraged and protected by French law. However, certain practices that distort or restrict competition are prohibited. More specifically, the law prohibits “unfair competition”, which refers to a set of abusive commercial practices by one company against one or more other companies.
The 4 most common unfair competition offences
Parasitism” in business law
Parasitism is a legal term used to describe a situation in which a company takes undue advantage of the reputation, goodwill or investments of another company in order to develop without the latter’s consent or participation.
This practice can take many different forms, such as copying a product, plagiarizing a brand name or logo, imitating product packaging, or reproducing a competitor’s advertising and communication campaigns.
One example of a case of parasitism is that of La Manif Pour Tous, which was condemned for having used the visual codes and hashtags of a SPA advertising campaign, without the latter’s authorization. La Manif Pour Tous was ordered to pay 15,000 euros to the SPA.
This type of practice can have negative legal consequences for the offending company, including fines, damages and even criminal sanctions. It is therefore important to understand the rules governing parasitism to avoid any negative consequences for your company’s business.
Counterfeiting in business law
Counterfeiting is the illegal practice of manufacturing, distributing or selling products bearing a trademark, patent or copyright without the authorization of the owner of these rights. It can have major economic consequences for the companies owning the counterfeit rights, such as loss of revenue, damage to their brand image and risks to consumer safety.
Counterfeiting doesn’t just concern little-known brands that have been condemned for reproducing the designs of famous and expensive brands. For example, Louis Vuitton was ordered to pay 800,000 euros in damages to a designer for using a clasp of its own creation without her authorization.
Counterfeiting can result in negative legal consequences for the offending company, including fines, damages and even criminal sanctions. Companies must therefore be aware of the legal risks associated with counterfeiting, and take steps to protect their intellectual property rights. It is important to comply with counterfeiting laws to avoid any negative consequences for your company’s business.
Disorganization in business law
Disorganization is a legal concept that refers to an unfair practice aimed at disrupting the operation of a competing business by creating obstacles or difficulties in its normal activities. This practice can take several forms, such as obstructing access to resources essential to the business, disseminating false information about the company or its products, or disrupting commercial relations between the company and its partners.
One of the best-known acts of disorganization is to launch a campaign to poach a competitor’s staff or customers.
For example, companies competing with the SNCF, set up by a former SNCF executive, were convicted of poaching 16 employees, even though the latter represented only a small proportion of the SNCF workforce.
Denigration in business law
Disparagement is an unfair practice that consists of making false or misleading statements or disseminating false or misleading information about a company or its products or services, with the aim of damaging its reputation and brand image.
Denigration can take many forms, such as spreading false rumors, publishing defamatory or malicious comments on social networks or online forums, or running misleading comparative ads that present the company or its products in a negative light.
You need to be particularly careful about how you communicate about your competitors, both to the public and on your social networks, for example.
For example, the start-up Matera, which competes with professional condominium managers, was ordered to pay €70,000 to several managers because its advertising campaign denigrated them.
If you have a development strategy that you think may flirt with unfair competition, we invite you to consult us before implementing it. Similarly, if you feel that one of your competitors is engaging in unfair competition, we can work with you to find the best way to put a stop to it and obtain compensation.
