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INTERNATIONAL AND NATIONAL LEGAL MODELS FOR
COMBATING UNFAIR COMPETITION: A COMPARATIVE ANALYSIS
Zokhirjon Ochilovich Mirzarakhimov
Independent PhD Researcher
https://doi.org/10.5281/zenodo.16760501
Abstract.
This article analyzes the problem of unfair competition within the
framework of both international and national legal systems. Using the examples
of the USA, Germany, France, Japan, Canada, and others, the author explores
legal mechanisms, legislative approaches, and practical differences in combating
unfair competition. The article compares broad and narrow interpretations of
the concept and classifies countries into three legal groups based on their
regulatory approach. It also addresses the legal uncertainty surrounding unfair
competition, forms of liability, and the need for legal adaptation in the context of
the digital economy. The findings emphasize the importance of integrating
international best practices into national antitrust policy frameworks.
Keywords:
unfair competition, competition law, antitrust legislation,
monopoly, international law, legal mechanisms, digital economy, legal
harmonization, case law, state policy
In both international and the majority of national markets, the dominance
of a market economy has been established. Within this system, the issue of
methods and means of competitive struggle for market share among business
entities is becoming increasingly relevant. Every year, we witness an
intensifying economic competition among these entities, as each one strives to
achieve a common primary objective in its activity — to gain the highest
possible profit through the sale of its goods or services. Nowadays, more and
more unlawful practices are emerging that aim to disrupt the balance of fair
market competition
1
.
In other words, every business entity seeks to win in the competitive
struggle against others. Unfortunately, in this pursuit, the interests of the state,
business partners, and most importantly, the rights of the key subject in market
relations — the consumer — are often ignored, which is unacceptable and
unnatural. One of the fundamental goals of market trade is to satisfy the needs of
the consumer; otherwise, the transaction cannot occur. There are many
parameters of competition and, consequently, many ways to win, and not all of
them are unlawful. The law restricts the freedom of the seller or producer only
1
Fajar M. Fair competition: The concept of regulation in the sharing economy //The Journal of Asian Finance,
Economics and Business. – 2020. – Т. 7. – №. 11. – С. 637-645.
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in cases where their actions cause harm to other participants in the trade system
(initially targeting rival enterprises, but ultimately affecting the consumer). In
such cases, we are dealing with a direct violation of legal norms.
Each national legislature on the international stage faces the task of
establishing frameworks that restrict the activities of business entities to ensure
that such activities do not cause legal or actual harm to the state, society, or
individual members of society — namely, consumers, that is, the citizens of the
state
2
.
From a legal and technical standpoint, the institution of combating unfair
competition occupies a different position within the legal systems of various
countries. In some states (e.g., the USA, Japan, and Canada), the norms on
combating unfair competition are integrated into antitrust legislation, as unfair
competition itself is viewed as one of the elements of monopolistic practices.
Within the framework of laws targeting monopolistic practices, specific
types of violations are identified and characterized as unfair competition.
However, such regulation can be considered more closed and limited, which,
especially today, may lead to the legislation lagging behind the current realities
due to rapid changes in various spheres, including entrepreneurship. In other
countries, particularly in Common Market states (such as those of the EU), this
legal institution forms an independent branch of civil and administrative law
regulation, functioning alongside specialized antitrust legislation, referred to
there as legislation against restrictive business practices. The regulatory
framework is thus represented by different legal acts.
In the context of this scholarly article, it is important to examine the global
experience of legal regulation in countering unfair competition. For the purpose
of improving the existing systems of legal regulation within national antitrust
legislation, it is of great significance to study and adopt the positive foreign
experience in this field and, as a result, to apply the most successful models of
international legal planning and regulation of various areas of competitive legal
relations.
For example, in France, the system of protection against unfair competition
is built on the general provisions of civil legislation. It is worth noting that this
deprives the law of flexibility and precision, forcing judges to seek analogies and
apply general civil norms that are not always adaptable to entrepreneurial
relations. Regarding compensation for damage caused by unlawful actions in
this context, a law was adopted in France in 1905, the essence of which is to
2
Stiglitz J. E. Regulating multinational corporations: Towards principles of cross-border legal framework in a
globalized world balancing rights with responsibilities //Am. U. Int'l L. Rev. – 2007. – Т. 23. – С. 451.
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combat fraud in the process of product distribution. This law was later
supplemented by a number of regulatory acts, such as those on misleading
advertising broadcasts, the law on consumer information, and others.
In Germany, the key legal act remains the "Law Against Unfair Competition"
(Gesetz gegen den unlauteren Wettbewerb), which contains general provisions
on dishonest commercial practices in the economic market. Based on this legal
act, German courts have developed extensive case law, which has formed a
system of suppression of unfair competition aimed at protecting the interests of
the market, the state, society, and consumers
3
.
Germany's adopted antitrust regulation somewhat differs from the typical
Western European model because it has a mixed nature. As a general rule, it
provides for a total ban on monopolies, but there are many exceptions to this
prohibition. This provides a basis for the Russian legal system to borrow certain
types of exceptions and methods of regulating the activities of natural
monopolies.
For example, a rather interesting exception is the granting of authority to
the German Minister of Economy to authorize transactions that, under other
circumstances, would be considered illegal due to anti-competitive restrictions,
but in this case, the minister determines that the economic benefits outweigh
the illegality of the restriction and justifies the action.
When examining the position of the United States of America in the context
of countering unfair competition, it should be noted that court decisions based
on the precedent system of law play a key role
4
. These decisions are based on
the state-level legislative acts aimed at suppressing unfair business practices,
which gives the legal system greater flexibility and adaptability to the dynamic
conditions of modern reality. Similarly, in England, case law in the area of
combating unfair competition has been developed by judicial bodies.
Let us draw attention to the lack of uniformity in the context of defining
unfair competition. In practice, unfair competition refers to the actions of
competing economic entities in relation to one another when evaluating such
subjective criteria as "good morals," "good faith," "fair custom," and so on. This
approach is enshrined both in international treaties and in the national
legislation of specific countries.
3
Möllers T. M. J. Enforcement of Unfair Competition Law by Notice of Violation, Rights of Consumers and Public
Authorities–Comparative Evaluation of the German Status Quo //Patents and Technological Progress in a Globalized
World: Liber Amicorum Joseph Straus. – Berlin, Heidelberg : Springer Berlin Heidelberg, 2009. – С. 413-429.
4
Bunn C. The National Law of Unfair Competition //Harvard Law Review. – 1949. – Т. 62. – №. 6. – С. 987-1001.
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Characterizing national legislation, it should be noted that a broad
understanding generally prevails, in which the concept of unfair competition
encompasses a wide variety of actions by competing business entities aimed at
monopolizing the market for their own goods or services. It is not feasible to
adopt a ready-made model of regulation solely from international instruments,
yet the general direction of legal development in this area is clear.
This understanding corresponds to a specific construction of national legal
systems, where rules on unfair competition can operate simultaneously with
general provisions of civil law and antitrust legislation. Additionally, protection
of violated rights can be carried out through various legal remedies. A narrow
interpretation of the concept of unfair competition should not be excluded
either, which includes specific types of dishonest behavior by competing
businesses
5
.
Currently, several groups of countries have formed, each reflecting a
particular approach to the protection against unfair competition — in other
words, those states where measures to combat unfair competition are
undertaken.
Researchers have identified three key groups. The first group includes
those countries that have adopted specialized laws addressing unfair
competition. These countries typically enact general prohibitions on unfair
competition and provide a non-exhaustive list of acts considered unfair.
Countries in this group include: Germany; Austria; Switzerland
Some other countries, such as Canada and Japan, also fall under this
category, as they provide similar frameworks, even if the legal form differs.
The second group includes countries that lack specialized legislation
defining the concept of unfair competition. In these countries, regulation is
based on provisions of civil codes supplemented by court practice. Examples
include: Italy; The Netherlands
6
;
The third group encompasses those countries whose legislation does not
clearly differentiate between the rules governing unfair competition and
antitrust regulation. These include: France; The United States; The United
Kingdom; Ireland; Russia; Austria and a number of other nations.
Meanwhile, it is interesting to note that the first countries to adopt antitrust
legislation were the United States and Canada, whose antimonopoly laws remain
at a rather high level to this day, despite the fact that these two countries fall
5
Sellers M. N. S. The doctrine of precedent in the United States of America //Am. J. Comp. L. – 2006. – Т. 54. – С. 67.
6
Charny D. Competition among jurisdictions in formulating corporate law rules: An American perspective on the race
to the bottom in the European communities //Harv. Int'l. LJ. – 1991. – Т. 32. – С. 423.
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into different regulatory groups. Thus, unfair competition is a problem faced by
the majority of countries, which is why the prohibition of such conduct exists
not only at the national level within each country but also at the international
level.
Unfair competition through deception, much like discreditation, involves
the dissemination of false information to consumers about a product. However,
in cases of deception, the distortion of information pertains specifically to one’s
own product with the aim of drawing more attention to it and increasing its
demand.
Countries address this problem through various legal means, which differ
depending on the legal system, national mentality, and economic conditions.
Nevertheless, a unified general concept has already been established and
enshrined in international treaties, and cooperation with countries that have
either a similar legal regulatory system to that of the Russian Federation or a
different one can significantly advance Russian competition (antitrust)
legislation..
References:
1.
Fajar M. Fair competition: The concept of regulation in the sharing
economy //The Journal of Asian Finance, Economics and Business. – 2020. – Т. 7.
– №. 11. – С. 637-645.
2.
Stiglitz J. E. Regulating multinational corporations: Towards principles of
cross-border legal framework in a globalized world balancing rights with
responsibilities //Am. U. Int'l L. Rev. – 2007. – Т. 23. – С. 451.
3.
Möllers T. M. J. Enforcement of Unfair Competition Law by Notice of
Violation, Rights of Consumers and Public Authorities–Comparative Evaluation
of the German Status Quo //Patents and Technological Progress in a Globalized
World: Liber Amicorum Joseph Straus. – Berlin, Heidelberg : Springer Berlin
Heidelberg, 2009. – С. 413-429.
4.
Bunn C. The National Law of Unfair Competition //Harvard Law Review. –
1949. – Т. 62. – №. 6. – С. 987-1001.
5.
Sellers M. N. S. The doctrine of precedent in the United States of America
//Am. J. Comp. L. – 2006. – Т. 54. – С. 67.
6.
Charny D. Competition among jurisdictions in formulating corporate law
rules: An American perspective on the race to the bottom in the European
communities //Harv. Int'l. LJ. – 1991. – Т. 32. – С. 423..
