Updated June 27, 2020
California’s “unfair competition” law prohibits false advertising and other anti-competitive practices. Lawsuits can be brought by either consumers or by businesses that have been damaged by a competitor’s unfair actions.
Common examples of unfair competition in California include, among many others:
- Selling products or services at different prices in different geographic locations within California (“locality discrimination”);1
- Selling a product or service below cost in order to destroy competition;2
- Offering secret rebates to some customers but not others;3 or
- “Bait-and-switch” advertising.4
To help you better understand California’s law on unfair competition, our California personal injury lawyers discuss, below:
- 1. What is “unfair competition”?
- 2. Who can sue for unfair competition in California?
- 3. What are the remedies for unfair competition?
- 4. What is the statute of limitations for unfair competition in California?
Consumers who have been damaged by unfair business practices may also wish to read our article on California’s “Consumers Legal Remedies Act” (“CLRA”).
California Business and Professions Code 17200 defines “unfair competition” as:
- Any unlawful, unfair or fraudulent business act or practice, or
- False, deceptive or misleading advertising.5
A business practice is “unlawful, unfair or fraudulent” if it is forbidden by law or is against public policy. Almost any violation of law can serve as the basis for an unfair competition claim if:
- It harms consumers, or
- It gives a business an unfair advantage over its competitors.
Examples of deceptive business practices include (but are not limited to):
- “Robocalling” or “spoofing” a phone number in violation of FCC regulations;
- Pretending to be affiliated with or endorsed by a better-known brand; or
- Luring consumers into a store by advertising a cheap price and then having only higher-priced options available (“bait-and-switch”).
To sue for unfair competition in California, someone must actually have lost money or property as the result of the false advertising or unlawful practices. Consumer watchdog groups and governmental organizations and lack standing to sue.6
In the case of unlawful practices, the plaintiff must usually also be able to establish that the defendant intended to destroy competition.7 Note that it is not necessary to prove this in cases of false or deceptive advertising.
Consumers damaged by unlawful practices who cannot prove intent to destroy competition may, nevertheless, be able to sue under California’s “Consumers Legal Remedies Act” (“CLRA”).8
An experienced California business torts litigator can advise you of your options.
Remedies for unfair competition in California can include:
- Recovery of the plaintiff’s actual economic damages; and/or
- Injunctive or equitable relief to prohibit the unfair practices.9
Additionally, a District Attorney or other government official acting on behalf of the public may be able to bring an action against the person responsible for the wrongful practices for:
- A civil penalty of up to $2,500 for each individual violation;10 and
- Criminal prosecution for violating California’s criminal false advertising laws.11
Lawsuits for unfair competition in California must be commenced within four years. The limitations period begins to run on the earlier of:
- Discovery of the unfair act, or
- When, in the exercise of reasonable diligence, the wrongful act should have been discovered.12
- California Civil Jury Instructions (CACI) 3300. Locality Discrimination.
- CACI 3301. Below Cost Sales.
- CACI 3320. Secret Rebates.
- California Business and Professions Code 17500.
- Same. See also Makreas v. First National Bank of N. Cal. (N.D. Cal. 2012) 856 F. Supp. 2d 1097.
- They may, however, have standing to sue under another law, such as false designation of origin under the Lanham Act.
- See, e.g., CACI 3300, endnote 1.
- California Civil Code sections 1750-1784.
- Business and Professions Code 17203.
- Business and Professions Code 17206.
- Business and Professions Code 17500, endnote 4.
- Business and Professions Code 17208.