Trade is the purchase and sale of products and services carried out by many companies with the aim of profit. There are too many companies involved, even for just one product or service. So many different ways are used to make a profit and sell products or services.
But not all of these ways may constitute good competition for other companies in the industry. That’s why governments have created an unfair competition law for this competition between companies to progress appropriately.
What is Unfair Competition?
Naturally, the definition of unfair competition should be defined within the unfair competition law. But, it is necessary to look at more than one law. Unfair competition rules are regulated by articles 54 to 63 of the new Turkish Commercial Code No. 6102. The actual definition of unfair competition is specified in the Turkish Commercial Code No. 6762, which is still in effect.
According to Law No. 6762, unfair competition is defined as the misuse of economic competition in a deceptive manner or other ways contrary to the rules of good faith. In the new Turkish Commercial Code No. 6102, it is also stated by which parties an act should be carried out to be considered unfair competition. In other words, it is necessary to look at both laws to obtain complete information about unjust competition law.
The Conditions of Unfair Competition
The unfair competition law mentions that certain conditions must be met for such a situation to occur. As stated in Article 54 of the Turkish Commercial Code, the following conditions must have happened for unfair competition to be mentioned:
- Deceptive or dishonest acts that will affect the relations between rival companies or suppliers and customer
- Existence of a commercial practice that meets the above qualifications
Regarding these conditions, it is not considered whether the perpetrator is at fault or whether there is any competitive relationship between the parties. Also, no damage needs to occur for the existence of unfair competition.
The unfair competition law presents the situations that constitute unfair competition to the responsible persons by example. However, the occurrence of unfair competition is not limited to these examples.
Importance of Unfair Competition Law
The competition aims to gain an advantage. Since the subject is related to trade, this competition is often considered economical. However, unfair competition law does not only protect individuals economically. Here, the importance of unjust competition law emerges.
Because unfair competition involves a moral wrong, that’s why in the unjust competition law, individuals don’t need to have suffered from economic losses as a condition. This way, an honest and fair competition environment can be provided for all parties involved in the trade.
Considering and Not Considering Using Unfair Competition
In some cases, companies may consider whether to use unfair competition. However, regardless of the company's position using it, acts that will cause unfair competition to constitute crimes approved by the law. In other words, it harms itself when a company aims to stand out from the unfair competition. Because thanks to the unfair competition law, heavy penalties are applied for such attempts.
For such cases, companies should be regularly informed about the situations they may encounter. Because the laws, so to speak, are constantly changing, even evolving. In other words, working with lawyers in Turkish Corporate Law is essential. For this, each company needs commercial lawyers that forward potential legal concerns related to these issues to the managers. So companies can continue their business life without breaking any laws.
What to Do If You Suspect Unfair Competition Against You
If you think there is an unfair competition element against your business, you have the right to file a lawsuit with the help of IP lawyers. According to the law, several lawsuits can be filed in this regard. The first of these is the declaratory judgment action. Thanks to this lawsuit being filed, it can be determined through the judicial bodies that unfair competition has occurred.
The second is the action for compensation. If it is determined that unfair competition has occurred, you can file a lawsuit for pecuniary or non-pecuniary damages. In addition, these lawsuits can be brought by companies and customers whose economic interests are damaged. Thus, unfair competition law protects all parties involved in a trade.
Legal processes can also be implemented to eliminate unfair competition during the litigation process. As a result, acting in a manner that will eliminate the civil conspiracy situation is necessary. In addition, a countersuit similar to a suit for damages can also be filed. This lawsuit can also be used for the correction of misleading and false statements as well as the material situation arising as a result of unfair competition.
What to Do If You Break the Unfair Competition Laws?
If you think that you are creating an unfair competition according to the unfair competition law, the cases mentioned above will be brought against you. At this point, it is necessary to eliminate the situations that lead to the formation of unfair competition. So the decision for pecuniary or non-pecuniary damages resulting from a lawsuit can be minimized.
In this regard, a positive prescription can also be the way out for companies. Companies that are faced with unfair competition have one year from the moment they learn about the situation and three years from the moment of the unfair competition event to file a lawsuit.
Competition Law vs. Unfair Competition Law
In most cases, competition and unfair competition laws are considered the same or something very different. However, the situation of these two laws, which are very similar to each other, is completely about completing each other. While competition law protects the competitive environment against violations, unfair competition law prohibits commercial behavior against good faith. So a fair competition environment is created with both laws.
Competition law also covers issues such as services, products, and their quality. All kinds of support can be obtained from Istanbul Law Firm regarding competition and unfair competition laws. So you can avoid entering into undesirable unfair competition situations.
You can read our previous article at /blog/term-sheet-advantages-and-disadvantages