Unfair Competition and False Advertising

Unfair Competition and False Advertising

If you are faced with a legal issue that involves claims of unfair business practices or false advertising, an Internet litigation attorney that possesses substantial experience litigating and defending these types of cases is a valuable asset.

Unfair business practices means any unlawful, unfair, deceptive, untrue, misleading or fraudulent business act or practice, including advertisements.  The same standard applies to commerce conducted on the Internet.  The law prohibits businesses from unfairly profiting at a rival’s expense by not telling truth or misleading consumers.  It consists of a body of related doctrines that gives rise to several different causes of action, including actions for interference with business relationships, violation of non-competition agreements, infringement upon trademarks, trade names, and service marks, monopolistic practices, and for publication of defamatory, false, or misleading representations.

False advertising typically involves false statements about a competitor’s product or service or its own product or service.  For example, a product that is advertised as “free” should describe all of the terms and conditions of the free offer clearly and prominently.  To state a claim under California’s Unfair Competition Law based upon the False Advertising Law, one must show that “members of the public are likely to be deceived.”  Whether or not something is considered to be “false advertising” is judged by an objective, reasonable person standard – one that is likely to mislead a consumer who is acting reasonably under the circumstances.  The aforementioned claims are equitable in nature and remedies are generally limited to injunctions and restitution.

The California Consumer Legal Remedies Act

The California Consumer Legal Remedies Act is often used as an alternative to the Unfair Competition Law and False Advertising Law, and was enacted to protect consumers against unfair and deceptive business practices.  Unlike the UCL, the CLRA contains no general proscription against “unfair” or “deceptive” business practices.  Rather, the Consumer Legal Remedies Act enumerates 24 activities as “unlawful,” including, but not limited to, misleading advertising and unconscionable contract provisions.  A CLRA plaintiff must be prepared to demonstrate “actual damage,” a frequently litigated issue.  Further, the CLRA is only applicable when the prohibited activity takes place during a transaction involving the sale or lease of goods or services to an individual “consumer.”  The remedies available under the CLRA also greatly differ from those allowed under the Unfair Competition Law.  The California Consumer Legal Remedies Act provides for simplified class certification and allows for actual damages, punitive damages, injunctive relief, restitution, and attorneys’ fees.

Hinch Newman employs aggressive negotiation and litigation tactics in pursuit of our clients’ rights.  Please contact us for a free consultation to discuss your particular matter.