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Unfair competition and the law

Competition is supposed to be good for the marketplace and the consumer, as well as for Texas business owners. When a company engages in unfair competition, though, it often harms other businesses, and the economy, as well. To discourage this activity, federal and state laws address many types of unfair trade practices.

According to the Cornell University Law School’s Legal Information Institute, federal law typically applies to infringement of trademarks and copyrights. False advertising that hurts consumers may also be handled by federal government agencies, such as the Federal Trade Commission. The laws that regulate companies to prevent monopolies are not typically related to unfair competition.

Some companies employ unfair trade practices that are not related to the issues addressed by the federal copyright and trademark laws. For example, a business owner may lie about the products or services of a competing company to discourage customers, or falsely represent the goods and services of his or her own company. It is also against the law for a person to steal trade secrets or attempt to steal customers by using a former employer’s confidential information.

The Texas statutes focus on many of these issues that may affect another business specifically, including deceptive trade practices such as misleading advertising. For example, an owner who claims that the company’s services have been endorsed by someone who did not endorse them is breaking state law. It is also prohibited to try to convince consumers that the products offered are actually from another company.

In Texas, illegal trade tactics typically cause issues for both competing businesses and consumers, and they may result in action against a company by the consumer protection division.

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