What Is Unfair Competition?

Unfair competition claims allow businesses and business owners to recover losses resulting from another's unfair, fraudulent, or deceptive business practices.  Because unfair competition claims arise under state law, the precise contours of the claim can vary by state. 

A wide variety of misconduct can qualify as unfair competition.  Deceptive business practices, such as false advertising, bait-and-switch selling tactics, or false claims concerning the origin or characteristics of a company's goods and services, can qualify.  Trade libel – where a company falsely disparages another company's products or services – can also qualify as unfair competition.

Unfair competition can also arise when a company misappropriates trade secrets or other proprietary information from a competitor.  For example, if a company's former employee uses knowledge and information that he gained during his employment to compete with his former employer, that can qualify as unfair