Unfair Competition: Difference between revisions

#There is a lot of discussion in the poskim regarding opening a competing business.<ref>The Gemara in Makkot (24a) derives the prohibition from the verse “he did not perform evil with his neighbor” (Tehillim 15:3), whereas the Gemara in Sanhedrin (81a) derives the same idea from the verse “he defiled his neighbor’s wife” (Yechezkel 18:6). The Gemara Yevamot 76b compares one who takes the livelihood of someone else away to a murderer. Rambam (Teshuva 273) says you are in violation of מסיג גבול רעהו (Devarim 27:17). Maharshal Teshuva 89 also applies this pasuk to the concept of encroaching on someone’s business unfairly. Terumat Hadeshen (128) writes that this is a rabbinic prohibition, but Chatam Sofer (CM 79) says it is from the Torah. See Chazon Ish Emunah U’Bitachon 3:15 regarding the faith someone who is facing competition should have. </ref> Nowadays, although it may sometimes be preferable not to open a competing business<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:1, S”A Harav Hilchot Hefker Vihasagat Gevul Seif 13, Chavot Yair 42. The prohibition of being יורד לאומנות חבירו, literally “descending to another’s profession,” or illegal competition, is derived from two distinct verses. </ref>, it is permissible for a competing business to open near a preexisting business and sell the same products. One business may even advertise and offer incentives to attract customers<ref>S”A CM 228:18, [http://www.dailyhalacha.com/m/halacha.aspx?id=1465 Rabbi Eli Mansour Dailyhalacha.com], Pitchei Choshen Hilchot Geneva ViHona’a 9:3. However, one may not speak lashon hara about his competitor’s product (Chafetz Chaim Hilchot Lashon Hara Klal 5: Halacha 7). See [http://www.yutorah.org/lectures/lecture.cfm/735658/rabbi-aaron-levine/advertising-and-promotional-activities-as-regulated-by-jewish-law/ Advertising and Promotional Activities as Regulated by Jewish Law] by Rabbi Dr. Aaron Levine </ref> , provided that the newcomer lives in or pays taxes to that city.<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:2. The Gemara (Baba Batra 21b) addresses a situation whereby one operates a mill in a mavoy (alley), and another wishes to open a similar establishment in the same mavoy. Rav Huna asserts that the owner of the first mill may prevent the newcomer from opening, as the newcomer will interfere with the incumbent’s livelihood. Rav Huna son of Rav Yehoshua argues that the first miller cannot prevent the newcomer from opening as long as the newcomer is from that town or at least pays taxes to that town. Rashi d”h “Shani Dagim” explains that the competitor can claim that “Whoever will come to me will come to me, and whoever will come to you will come to you.” Rif (Baba Batra 11a in pages of Rif), Rambam (Hilchot Shechenim 6:8), and Rosh (Baba Batra 2:12) follow the latter opinion, and this is the ruling of the Tur and S”A C”M 156:5.  

Rama (based on Tosafot Baba Batra 21b “vi’ee”) rules that an outside resident paying local taxes may open an establishment in a different mavoy of the city, but not in the same mavoy as the already existing business. Rabbi Chaim Jachter ([http://www.jlaw.com/Articles/hasagatgevul.html Gray Matter Hasagat Gevul: Economic Competition in Jewish Law]) writes that the modern day neighborhood is equivalent to the mavoy of the Gemara.