Competition is a special rivalry of subjects of economic relations. Each of them seeks to create the best conditions for themselves and get maximum business results.
Classification
Competition may be:
- perfect;
- unscrupulous;
- imperfect;
- price;
- monopolistic;
- business;
- banking, etc.
Main types
In the economic system, there are two basic types of competition: perfect and imperfect. The first is a theoretical construction, an ideal. This model is used to develop a methodology for analyzing other market structures. The imperfect type is represented by monopoly, monopolistic competition, oligopoly. In certain actions, these species do not differ, but they have a number of specific features.
A monopoly, for example, is usually represented on the market by one company, which is quite large. For its successful functioning it is necessary to constantly maintain uniqueness. An oligopoly is formed by several companies that have the opportunity to agree on a joint influence on the state of the market. The observance of stability against the background of maintaining a given level of profitability is one of the key goals. Monopolistic competition is understood as a model in which each company does not have a significant impact on market conditions. Accordingly, subjects act according to their capabilities.
Within the framework of such a model, the main emphasis, as a rule, is placed on differentiation. In this case, there is no strategic behavior (unlike oligopoly). With the development of the market, issues related to unfair competition of subjects have become increasingly relevant. The main steps to regulate relations in the market sphere were taken after the collapse of the USSR.
Normative base
In the Russian Federation, the concept of legislation regulating competition issues is implemented through the approval of a special legal act. Together with a complex of antitrust provisions, additional norms were included in it. Initially, the Law of the RSFSR No. 948-1 did not disclose the concept of unfair competition. In Art. 10 of this act provided for a general ban on it. Forms of unfair competition were also established in the norm. However, this list was approximate. Later, the legal act was amended.
Federal Law "On Protection of Competition"
At present, the new Law of July 26, 2006 is in force. The Federal Law "On Protection of Competition " establishes legal and organizational principles, methods of preventing and suppressing monopolistic activity. The regulatory act updated the tools, unified the mechanism for regulating relations in the financial and commodity markets. Thus, the fight against unfair competition has reached a qualitatively new level.
Definition
The problem of unfair competition has necessitated the adoption of prompt legislative measures. As one of them was a change in the legal framework regarding monopolistic activity. Law No. 135 merged the provisions of normative acts No. 948-1 and No. 117. In the new document, the term “unfair competition” has undergone some revision. The changes, however, did not affect its content.
According to Art. 4 (p. 9), unfair competition is considered to be any actions of economic entities or their groups aimed at taking advantage of their business activities that are contrary to law, customs of circulation, the requirements of reasonableness, integrity, fairness, causing or capable of causing losses to other business entities or damage their business reputation.
Specificity
An important conclusion follows from the content of the definition. The key element is always action. Even if all other signs of unfair competition are present, inaction cannot in this case be considered as a violation of the law. This is the difference from monopolistic activity. In certain circumstances, inaction may also act as it. The problem of unfair competition arises in the framework of relations of entities on the same market. In this case, the person conducting economic activity and against whom unlawful acts are performed, and the party violating the requirements of the law must be in a certain interaction. They must be competitors.
The key qualifying element is the contradiction of the actions of the subject to the law, the requirements of integrity, justice, reasonableness, customs of circulation. Another important sign of recognition of competition as unfair is the infliction of loss or damage to reputation. Harm or financial loss does not have to be real. In this case, the presence of the potential for causing them is sufficient.
Forms of unfair competition
In article 14 (part 1) of Law No. 135 there is a general ban on unlawful actions of some entities in relation to others. In addition, the norm defines various actions that are regarded as forms of unfair competition . They are grouped into 5 categories. The law identifies the following forms of unfair competition :
- Distribution of distorted, false, inaccurate information that could cause financial damage to an economic entity or damage its reputation.
- Misleading consumers about the place, method and nature of manufacturing a product, its properties and quality.
- Incorrect comparison by an economic entity of products sold or manufactured by it with goods of other manufacturers.
- Sale of products with the unlawful use of the results of intellectual work and means of individualization of a legal entity, services, works, objects equated to them.
- The receipt, disclosure, use of production, scientific, technical, trade information, trade secrets, including without the consent of its owner.
Important point
The above actions are subject to unconditional prohibition, regardless of their compliance with the conditions included in the interpretation of the term " unfair competition". Judicial practice assumes that the above manifestations do not need to be correlated with the definition enshrined in Art. 4. Provided for in Art. 14 formulations are considered as direct rules applied directly.
Means of individualization
Part two of Art. 14 of Law No. 135 includes provisions prohibiting unfair competition in intellectual property. They do not have an approximate corpus delicti. By legal design, these provisions are close to the norms of Art. 10 GK. By virtue of this article, the abuse of the right, the use of legal opportunities to limit competition is prohibited. The latter is not covered by the definition enshrined in Art. 4 of Law No. 135. However, despite this, the actions of subjects that violate the provisions of Art. 14, part 2, are regarded as abuse of law in other forms.
Dissemination of false, distorted, inaccurate information
This is the first form of unfair competition established in Art. 14. It should be noted that the distribution of distorted and inaccurate information is included. This is of particular law enforcement importance, since many entities use covert means to avoid direct attacks. Discrediting is aimed at attracting customers to products by providing false, distorted or inaccurate information about the competitor, his services or products. These actions can cause damage not only to the business entity, but also to the consumer. There are situations when a person disseminates information that is not true about himself. However, he does not have the goal of discrediting other economic entities. The key signs of unfair competition of this type should include:
- Distribution of defective information.
- The ability of information to damage reputation or financial loss.
Misleading
It, like the dissemination of defective information, is aimed at attracting consumers to their services, goods or work. However, in this case, attacks against other entities are not applied. An unscrupulous manufacturer provides false information regarding its products. However, misrepresentation is not limited to knowingly false statements. The subject can provide reliable information, which for one reason or another can form a false idea about the object. In this case, neither intent nor intention to cause damage will matter.
Invalid comparison
Initially, in the Law of the RSFSR, this composition contained an important reservation. In the normative act, incorrect comparison was regarded as inappropriate advertising. As a form of unfair competition, it can be used independently or be included in other actions aimed at discrediting the subject or misleading consumers. On the world market there is a different attitude towards the admissibility of applying comparisons. Some experts believe that criticism of a competitor, if it is based on facts and is true, will be very useful. Other authors fundamentally reject the ability to compare products or services. Domestic legislation regulating competition issues does not create obstacles for true criticism. Meanwhile, it should be treated with caution, given the obvious interest of the subjects who express it.
Illegal use of mental products
Exchange, sale and other introduction into circulation of products is not allowed if the results of intellectual work and means of individualization of products, services, legal entities, equivalent to them, were unlawfully used. This offense is associated with the actions of an economic entity that can provoke confusion in relation to another manufacturer. It is caused by the violation of exclusive rights to products of intellectual labor and means of individualization.
Additionally
In the third part of Article 14 of the Federal Law No. 135, it is possible to send a decision of the antimonopoly authority on violation of the provisions of part 2 of this rule regarding the use and acquisition of exclusive rights to a trademark to invalidate the provision of legal protection. The specified act is sent to Rospatent. This opportunity can be used by an interested person whose right has been violated by unfair actions of a competitor.