Anonymous

Unfair Competition: Difference between revisions

From Halachipedia
no edit summary
No edit summary
No edit summary
Line 8: Line 8:
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.   
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.   
However, Pitchei Choshen Geneva ViHona’a 9: note 2 explains that in the modern business environment, it does not stand to reason that if there is one store or business in town, that store should be given a monopoly on the entire town. This is especially true for big cities, where there is plenty of room for several stores and businesses to make a good income. Rabbi Aryeh Lebowitz ([http://www.yutorah.org/lectures/lecture.cfm/736064/rabbi-aryeh-lebowitz/hasagas-gevul-unfair-competition/ Hasagas Gevul - Unfair Competition on Yutorah]) raises this argument as well. Rabbi Chaim Jachter ([http://www.jlaw.com/Articles/hasagatgevul.html Gray Matter Hasagat Gevul: Economic Competition in Jewish Law]) quotes that Rav Soloveitchik thought that the laws of competition do not apply in America but didn’t explain why he felt that way. </ref>
However, Pitchei Choshen Geneva ViHona’a 9: note 2 explains that in the modern business environment, it does not stand to reason that if there is one store or business in town, that store should be given a monopoly on the entire town. This is especially true for big cities, where there is plenty of room for several stores and businesses to make a good income. Rabbi Aryeh Lebowitz ([http://www.yutorah.org/lectures/lecture.cfm/736064/rabbi-aryeh-lebowitz/hasagas-gevul-unfair-competition/ Hasagas Gevul - Unfair Competition on Yutorah]) raises this argument as well. Rabbi Chaim Jachter ([http://www.jlaw.com/Articles/hasagatgevul.html Gray Matter Hasagat Gevul: Economic Competition in Jewish Law]) quotes that Rav Soloveitchik thought that the laws of competition do not apply in America but didn’t explain why he felt that way. </ref>
#If the newcomer threatens to cut off the income of the original tradesman entirely, many rule that the incumbent has the right to prevent the competitor from opening his business.<ref>See Pitchei Teshuva 156:3 at length. Aviasaf (cited by the Mordechai, Baba Batra 516) rules that it is forbidden for somebody, even if he lives locally, to open a store at the entrance to a mavoy satum (a dead-end alley), if a similar establishment is already located within the mavoy. The reason for this is that opening such a store will bring the original shopkeeper’s business to ruin. Potential customers will see only the new store upon entering the alley, and the original establishment will go unnoticed.
#If the newcomer threatens to cut off the income of the original tradesman entirely, many rule that the incumbent has the right to prevent the competitor from opening his business.<ref>See Pitchei Teshuva 156:3 at length. Aviasaf (cited by the Mordechai, Bava Batra 516) rules that it is forbidden for somebody, even if he lives locally, to open a store at the entrance to a mavoy satum (a dead-end alley), if a similar establishment is already located within the mavoy. The reason for this is that opening such a store will bring the original shopkeeper’s business to ruin. Potential customers will see only the new store upon entering the alley, and the original establishment will go unnoticed.
The Beit Yosef C.M 156 explains that the ruling of Aviasaf follows the opinion of Rav Huna, which is not according to Halacha. Thus, it would seem from S”A C.M 156:5 that one may not prevent another business from opening nearby even if it will certainly eliminate his own business. This is the ruling of the Beit Ephraim C.M 26. The Rama (Darchei Moshe 156:4) however, explains that according to the Aviasaf, all opinions agree that it is prohibited to open a new business if this will cause the original business (the one inside the mavoy) to collapse. In other words, cases of “definite damage” do not fall into the principles above, and it is forbidden for one business to cause “definite damage” to another.
The Beit Yosef C.M 156 explains that the ruling of Aviasaf follows the opinion of Rav Huna, which is not according to Halacha. Thus, it would seem from Shulchan Aruch C.M. 156:5 that one may not prevent another business from opening nearby even if it will certainly eliminate his own business. This is the ruling of the Beit Ephraim C.M 26. The Rama (Darchei Moshe 156:4) however, explains that according to the Aviasaf, all opinions agree that it is prohibited to open a new business if this will cause the original business (the one inside the mavoy) to collapse. In other words, cases of “definite damage” do not fall into the principles above, and it is forbidden for one business to cause “definite damage” to another.On the other hand, the Pitchei Teshuva 156:3 quotes the Chavos Yair that even the Rama thinks this is only in the opinion of Rav Huna, and we don't follow his opinion. Therefore, even if the incumbent would go out of business, he cannot prevent a competitor from opening.
In a teshuva, the Rama (Siman 10) brings this Aviasaf among other arguments and rules that it is forbidden for a second publisher to publish an already published work (in this case the Mishneh Torah of the Rambam), if this will inevitably bring the first publisher to ruin. Sh”t Chatam Sofer (Siman 61, 79) also rules like this Aviasaf on a similar question where the incumbent business would be forced to close down. Rav Moshe Feinstein (Iggerot Moshe C.M 1:38) brings several arguments including the Aviasaf and concludes that a new shul could not open because they would ruin the income of the rabbi of the existing shul. Pitchei Teshuva 156:3 quotes Sh”t Masat Binyamin 27 that if there is a law that only allows one store, a second one may not open and force the initial one to close. He notes that the Masat Binyamin doesn’t quote the Aviasaf and must think that this is even for the Rishonim who disagree with the Aviasaf.  
In a teshuva, the Rama (Shut Siman 10) brings this Aviasaf among other arguments and rules that it is forbidden for a second publisher to publish an already published work (in this case the Mishneh Torah of the Rambam), if this will inevitably bring the first publisher to ruin. Shut Chatam Sofer (61:79) also rules like this Aviasaf on a similar question where the incumbent business would be forced to close down. Rav Moshe Feinstein (Iggerot Moshe C.M. 1:38) brings several arguments including the Aviasaf and concludes that a new shul could not open because they would ruin the income of the rabbi of the existing shul even if the shul will still have a minyan. Pitchei Teshuva 156:3 quotes Shut Masat Binyamin 27 that if there is a law that only allows one store, a second one may not open and force the initial one to close. He notes that the Masat Binyamin doesn’t quote the Aviasaf and must think that this is even for the Rishonim who disagree with the Aviasaf.  
Rav Moshe Feinstein (Iggerot Moshe C”M 1:38) writes that loss of livelihood is not defined by a loss of one’s home or the ability to put food on the table. It means interfering with his ability to afford as much as an average person in his times. </ref>
Rav Moshe Feinstein (Iggerot Moshe C.M. 1:38) writes that loss of livelihood is not defined by a loss of one’s home or the ability to put food on the table. It means interfering with his ability to afford as much as an average person in his times. </ref>
#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>  
#
#
#There is a lot of discussion in the poskim regarding opening a competing business.<ref>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>,  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> , However, Furthermore, even when the newcomer is permitted to enter the market, he is prohibited to compete in an unfair manner, such as by selling below cost.<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:3, Aruch Hashulchan 156:11, Erech Shai 228:18. </ref>
#There is a lot of discussion in the poskim regarding opening a competing business.<ref>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>,  , However, Furthermore, even when the newcomer is permitted to enter the market, he is prohibited to compete in an unfair manner, such as by selling below cost.<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:3, Aruch Hashulchan 156:11, Erech Shai 228:18. </ref>
#If the new business will charge lower prices or sell higher quality, some say that we cannot stop him from opening.<ref>Aruch Hashulchan 156:11, Pitchei Choshen Hilchot Geneva ViHonaa 9:8, Mishpitei Hatorah 2:10. This is based on the Rosh (Baba Batra 2:12), quoting the Ri ibn Megash. Although the Beit Yosef quotes that the Ramban disagrees, the Rosh is mentioned as a yesh omrim in the Rama 156:7. See Rabbi Moshe Sternbuch (Teshuvot Vihanhagot 1:800) on opening a competing restaurant.</ref>
#If the new business will charge lower prices or sell higher quality, some say that we cannot stop him from opening.<ref>Aruch Hashulchan 156:11, Pitchei Choshen Hilchot Geneva ViHonaa 9:8, Mishpitei Hatorah 2:10. This is based on the Rosh (Baba Batra 2:12), quoting the Ri ibn Megash. Although the Beit Yosef quotes that the Ramban disagrees, the Rosh is mentioned as a yesh omrim in the Rama 156:7. See Rabbi Moshe Sternbuch (Teshuvot Vihanhagot 1:800) on opening a competing restaurant.</ref>