Unfair competition

In the European Union competition is free and, within certain limits, market participants may compete with each other to promote or advertise their own products or services, provided this is done in an honest manner, on the basis of good faith.

In the interest of free competition and of all market participants, the legislator, through the rules on unfair competition, prohibits practices which are contrary to the requirements of good faith (“acts of unfair competition”).

An act can be qualified as “unfair competition” only if it takes place on the market (internal acts that are not externalised cannot be considered) and if it is carried out with the aim of “promoting or ensuring the provision on the market of one’s own or a third party’s services” (the “competitive purpose”).

The regulations on unfair competition are applicable both to entrepreneurs and to any subject (natural or legal person) participating in the market (farmers, craftsmen, professionals…) and a competitive relationship between the subjects involved is not necessary.

What are the acts of unfair competition?

Any conduct “objectively” contrary “to the requirements of good faith” is qualified as unfair. By way of example, among others, the following acts are considered unfair:

  • Acts of deception: a misleading conduct which uses, manipulates or presents information, whether false or true, in order to mislead recipients and to influence their economic behaviour in relation to important aspects such as, for example, the existence or nature of products, the main characteristics of a service (e.g. its benefits, risks, delivery, use, quantity, specifications, geographical origin, etc.), price, etc.
  • Acts of confusion: this includes any conduct likely to create confusion with the activity or services of a third-party company (including the risk of association by consumers as to the origin of certain services).
  • Acts of imitation: in itself, imitation of third-party goods or services is free provided that it is not unfair, i.e. it is not intended to create in the consumer an “association with the goods or services of others” or to take unfair advantage of another’s reputation or efforts.
  • Exploitation of the reputation of others: for example, it is unfair to use third parties’ trademarks to take unfair advantage of the commercial or industrial reputation acquired by a third party in the marketplace.
  • Breach of trade secrets.

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