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.

As an Internet law litigation firm, Hinch Newman possesses extensive experience representing clients in sophisticated Internet unfair competition litigation matters. Cyberspace is just another advertising medium and the same basic rules apply to Internet marketing that apply to any other form of consumer marketing or advertising.

Advertising must be truthful and not mislead consumers. The Federal Trade Commission Act permits the FTC to act in the interest of all consumers to prevent deceptive and unfair trade acts or practices. The FTC has determined that a representation, omission or practice is deceptive if it is likely to mislead consumers and affect consumers’ behavior or decisions about the product or service. Claims must be substantiated, especially when they concern health and safety. Disclaimers and disclosures must be clear and conspicuous.

There are countless examples of false advertising and unfair competition on the Internet. The body of law governing unfair competition and false advertising on the Internet is comprised of a combination of federal and state legislation, as well as common law.

It serves to protect the ability of businesses to distinguish themselves and their products and services. It also serves to cultivate and preserve goodwill. Additionally, the law seeks to increase competition and promote stability by encouraging consumers to rely upon a merchant’s trade name and reputation while comparing the quality and prices of a competitor’s products or services.

Both individual and class action consumer protection litigation are often brought in California under the Unfair Competition Law (“UCL”), California Business and Professions Code Sections 17200 through 17209, the False Advertising Law (“FAL”), California Business and Professions Code Section 17500, and the California Consumers Legal Remedies Act (“CLRA”), California Civil Code sections 1750 through 1784. The UCL was designed to protect competitors and consumers from unfair, unlawful, and fraudulent business practices and requires that a plaintiff establish the loss of money or property as a result of the alleged violation.

If you are the victim of Internet false advertising or deceptive business practices, it is crucial that you contact an accomplished Internet law litigation attorney who can advise you with regard to the applicable federal and state remedies that may be available to you, including injunctive relief and/or actual monetary damages.

Alternatively, if you have been wrongfully accused of such violations we will implement an aggressive and cost-effective defense strategy, including a detailed analysis of regulatory factors used to evaluate the conspicuousness and prominence of required disclosures in online advertisements. For assistance with an unfair business practices litigation matter, call us to set up a free telephone consultation.  You may also contact us by email at info@hinchnewman.com or via our Free Online Case Submission Form.

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.

Please contact us at (212) 756-8777, via email to info@hinchnewman.com or via our Online Case Submission Form.