In an ideal world, people work honestly and compete in the same way in the product market. Fair competition is beneficial when done in accordance with laws and traditions. Unfair competition, which violates the rules of healthy business rivalry, is another matter. It is illegal.
This malicious phenomenon can spoil the reputation of a company, turn customers away from it, and deprive a noticeable part of its revenue. For each state, one of the important areas of activity in the field of economic policy should be the fight against unfair competition. Ukrainian legislation clearly describes which methods of competition cannot be used, what kind of punishment will follow.
Protecting your business reputation, honor and dignity is very important, as is healthy competition. If competitors are using dishonest methods, the business owner should try to stop the violation as quickly as possible. SION’s specialists have extensive experience in countering dishonest competitors. By filing claims or lawsuits, we have helped prevent illegal activities many times.
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Unfair competition forms
Illegal competition – dishonest business conduct, creating obstacles for competitors and advantages – for yourself. It contradicts the laws, inflicts losses on business entities. The Law “On Protection from Unfair Competition” dated 07.06.1996 No. 236/96-ВР is the main document that deals with countering illegal competition.
The competition law lists the main types of abuse. They were divided into three groups. The first is the misuse of business reputation. This includes the following offenses:
- unlawful use of the company name, someone else’s TM, logo;
- affixing your name to someone else’s product, using someone else’s product;
- copying the appearance;
- unfair (comparative) advertising with someone else’s product.
The second group is creating obstacles to competition. This is discrediting, disseminating inaccurate or false information, creating a distorted view of the product. Such actions can damage the reputation. These include:
- imposition of goods or services with a compulsory assortment (unnecessary to the recipient);
- calls for a boycott of the manufacturer or seller;
- inducement to discriminate against buyers;
- bribery of an employee of a supplier;
- misuse of competitive advantage.
Another type of unfair competition is the illegal collection, use and disclosure of trade secrets. And also the inducement of employees of the competing firm to such actions.
Violations may be implicit and not directly indicated at the legislative level. For example, mixing with other products on the market is prohibited, this is a common form of illegal activity. Even indirect violations are punished, this is confirmed by antitrust practice. Please contact us for advice – we will help you determine if a competitor’s action is a violation.
Deliberately misleading the consumer
It is not just the manufacturer who is harmed by illegal rivalry. By giving false information or selling counterfeit goods, it misleads buyers. This is one of the most common fraudulent practices used to gain a competitive advantage. 90% of all antitrust violations are misleading.
The dissemination of deceptive information is illegal according to Art. 15 of the aforementioned law. This can be inaccurate or false information, suppression, unclear way of presenting – all that can affect the decision to purchase. An example is the distribution of flyers with offers of a profitable instant loan from an organization that is not financial. Or an indication of false product characteristics (“medicinal” for a product that is not a drug).
In such cases, the buyer himself, who succumbed to deceptive advertising, can defend his rights in accordance with the law “On the Protection of Consumer Rights” (dated 12.05.1991, No. 1023-XII). If necessary, SION specialists will help individuals and companies to defend violated rights.
Legal protection against unfair competition
Individuals or businesses are entitled to legal protection of interests if competitors are acting in bad faith. There is no need to prove the amount of losses, it is enough to have such an opportunity. But you have to prove that the illegal actions are carried out by a competitor. For example, if a non-competitor spreads false information, it is unpleasant and defamatory, but not competition.
There are several main ways to suppress illegal actions:
- Submit a written complaint to competitors. Clearly state what the violation is perceived to be, give arguments, demand an end.
- The administrative procedure for the decision assumes that you can contact the Antimonopoly Committee (AMCU) – the main body that deals with dishonest competition. Within 6 months after the business entity learns about the infringement of rights, he has the right to file an application for unfair competition with the AMCU. The document is considered up to 30 calendar days, sometimes up to 60 days.
- Judicial order. To achieve material compensation (compensation for damage), the withdrawal of counterfeit goods from the market and to resolve issues that relate to monopoly, it is possible only by filing a lawsuit.
- Contact the State Customs Service (GTS). Goods that contain industrial property are entered in the customs register.
The legislative framework of Ukraine has been worked out, and in practice, violators are often punished. However, violations in the field of economic competition do not stop. Business owners are not always able to independently apply to the court or the AMCU in order to protect their rights. SION lawyers will help you to obtain legal protection. They will tell you where to file a complaint, competently draw up an appeal and submit it on time, on time. If necessary, they will send a reasoned claim to the offender, and act as mediators in the negotiations.
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Liability for Unfair Competition
In Ukraine, violators are mainly brought to administrative responsibility. For violation of the prohibition on unfair competition, it is assumed:
- Penalty up to 5% of the proceeds for the previous reporting year. Or 10 thousand tax-free minimum income for the year, if there is no revenue.
- Can be forced to refute false or inaccurate information.
- Will demand an end to anti-competitive actions.
The administrative penalty must be paid within 30 days. For a late payment of a fine, a penalty of 1% is charged for each day. All possible types of liability are set out in articles 20-26 of the antitrust law.
This legal mechanism really works, the numbers are impressive. For example, in 2020, the Antimonopoly Committee stopped 1,624 violations in the field of competition law, and fined violators UAH 1.6 billion.
Unfair competition in Ukraine
In our country, there is a strong competition: many companies are closely watching their rivals, their products, and advertising. At the same time, they strive to save on their own marketing, to use the popularity of other people’s goods. There are many precedents that were considered in Ukrainian courts regarding the illegal use of similar packaging of someone else’s popular product and other actions.
Cases involving such issues require careful pre-trial preparation, collection and recording of evidence. You have to involve experts from outside areas in order to use their professional knowledge to prove confusion or other points. Expertise can be linguistic, naming, merchandise or intellectual property. It is advisable to attach the conclusions of the experts to the application to the antimonopoly authorities.
You can proactively protect your business from competitors. Experienced SION lawyers will work ahead of the curve. We will close all the loopholes for possible illegal actions on the part of rivals: we will draw up non-disclosure documents for company employees, and we will protect trade secrets. We also organize protection against actions that have already taken place.
What do we offer:
- analyze and advise whether the action is a violation;
- work out a strategy for solving the problem;
- try to resolve the conflict peacefully – we will send a claim, we will negotiate;
- prepare an application to the AMCU or a lawsuit, we will accompany the consideration;
- we’ll get the offender to pay the fine or the appropriate court order.
Our specialists have extensive experience in resolving disputes related to competition law. They will help protect the business reputation, honor and dignity of the business. For advice on your situation by email us: email@example.com
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