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What are unfair business practices?

Apr 21, 2022 | Business Litigation

Some see business as a “dog-eat-dog” world where anything goes. The law does not.

While competitiveness can be crucial to succeed, you need to ensure you do not infringe the rules of the game. Even if you do not, others may still accuse you of doing so out of misunderstanding or jealousy.

California law forbids businesses from anything that amounts to unfair competition

This is what California’s unfair competition law covers::

  • Any unlawful, unfair or fraudulent business act or practice
  • Any unfair, deceptive, untrue or misleading advertising

That gives people a broad scope to throw accusations at you. Let’s say you are in retail. Here are a few examples of actions that could fall under the act:

  • Price fixing: You and one or more competitors agree that the price for a particular item must never drop below a certain amount, regardless of changes in the actual price to produce it.
  • False promises: Customers love a “Your money back if you are not satisfied, no questions asked” guarantee, provided that you give it to them when they ask for it.
  • Misleading pricing: You put up a sign next to the jeans saying “Jeans 2 for 1.”  If there are restrictions on that offer, such as “only on Tuesdays” or “only on Levis,” make sure that is clear. Customers will be upset if they think you are trying to trick them into grabbing two pairs of full-price jeans.

If you face an accusation of unfair or deceptive business practices, do not assume you can just brush it aside. Regardless of the eventual resolution, the very suggestion that you have acted inappropriately could harm your business. Getting immediate help to defend your business will be crucial before the situation blows up out of proportion.