Unfair competition

What it means

Unfair competition is conduct in business competition that is contrary to good competitive morals and capable of harming other competitors or consumers. The Commercial Code prohibits it in general and lists its typical forms.

They include misleading advertising, misleading labelling of goods, creating a risk of confusion with another’s product or business, riding on another’s reputation, bribery, disparaging a competitor, breaching trade secrets and endangering consumers’ health or the environment.

Those mainly defending against unfair competition in court are affected competitors and consumer associations. They can demand that the conduct stop, that its effects be removed, appropriate satisfaction, compensation for damage and the surrender of unjust enrichment.

How it works in practice

In marketing we recommend that claims in advertising be verifiable. Superlatives such as “cheapest” or “best”, or comparisons with a named competitor, must be substantiated, and in copywriting it pays to have the evidence ready.

When choosing a company name, logo or domain, check that they do not create confusion with an existing brand. A registered trademark protects the owner more strongly, but even an unregistered name used for a long time cannot be copied without risk.

When staff leave for competitors or in dealings with partners, know-how is protected by contract, for example an NDA and a non-compete clause. Misuse of a trade secret is a form of unfair competition, but protection requires that the company genuinely kept it secret.

What to watch out for

A common mistake is hidden advertising, such as paid reviews or influencer posts without labelling. It is a misleading practice that supervisory authorities and competitors increasingly challenge.

The second risk is a negative campaign against a competitor, such as spreading unverified information about its problems. Even true information can be unfair competition if it is capable of causing harm and is not presented fairly.