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Unfair Competition: Difference between revisions
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#Although permitted, it may sometimes be preferable not to open a competing business.<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:1, Mahrashdam C.M. 407, Shulchan Aruch 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. Chasam Sofer Bava Basra 21b based on Gemorah Makot 24a </ref> | #Although permitted, it may sometimes be preferable not to open a competing business.<ref>Pitchei Choshen Hilchot Geneva ViHona’a 9:1, Mahrashdam C.M. 407, Shulchan Aruch 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. Chasam Sofer Bava Basra 21b based on Gemorah Makot 24a </ref> | ||
== | ==General Guidlines== | ||
# | #It is permissible for a competing business to open near a preexisting business and sell the same products 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 Shulchan Aruch 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. | 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> | ||
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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. | 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> | #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> | ||
#Whenever 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 there is a specific day that is reserved for people to come and shop there, nobody can prevent anyone else from opening.<ref>Shulchan Aruch C.M. 156:7 based on Bava Basra 22a about Yom HaShuk. Rashi explains that on this day people come from all over, so the residents of the city don't have priority. [http://www.workplacehalacha.com/category/choshen-mishpat/hasagas-gevul-unfair-competition/ Rabbi Wasserman] applied this same concept to areas like the diamond district as well.</ref> | |||
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##Internet businesses.<ref>[http://www.jlaw.com/Articles/hasagatgevul.html%20Gray%20Matter%20Hasagat%20Gevul:%20Economic%20Competition%20in%20Jewish%20Law Rabbi Jachter]. Similarly, S”A C”M 156:7 based on Baba Batra 22a rules that the restriction on outside competition does not apply to a market day, when people from outside the town come to shop. Rabbi Yehoshua Pfeffer ([http://dinonline.org/2015/08/31/opening-shop-laws-of-hasagas-gevul/ Opening Shop? Laws of Hasagas Gevul] on dinonline.org) applies this in a general sense to malls and large shopping centers, which attract shoppers from out of town. </ref> | ##Internet businesses.<ref>[http://www.jlaw.com/Articles/hasagatgevul.html%20Gray%20Matter%20Hasagat%20Gevul:%20Economic%20Competition%20in%20Jewish%20Law Rabbi Jachter]. Similarly, S”A C”M 156:7 based on Baba Batra 22a rules that the restriction on outside competition does not apply to a market day, when people from outside the town come to shop. Rabbi Yehoshua Pfeffer ([http://dinonline.org/2015/08/31/opening-shop-laws-of-hasagas-gevul/ Opening Shop? Laws of Hasagas Gevul] on dinonline.org) applies this in a general sense to malls and large shopping centers, which attract shoppers from out of town. </ref> | ||
##Business districts in which the original business owner would benefit from a new business opening up (i.e. more customers will arrive).<ref>[http://www.jlaw.com/Articles/hasagatgevul.html%20Gray%20Matter%20Hasagat%20Gevul:%20Economic%20Competition%20in%20Jewish%20Law Rabbi Jachter] quoting Rav Moshe D. Tendler and Rav Basri, since the original storeowners benefit from the newcomers. Rabbi Aryeh Lebowitz ([http://www.yutorah.org/lectures/lecture.cfm/736064/rabbi-aryeh-lebowitz/hasagas-gevul-unfair-competition/ Hasagas Gevul - Unfair Competition on Yutorah]) brings the same argument. </ref> | ##Business districts in which the original business owner would benefit from a new business opening up (i.e. more customers will arrive).<ref>[http://www.jlaw.com/Articles/hasagatgevul.html%20Gray%20Matter%20Hasagat%20Gevul:%20Economic%20Competition%20in%20Jewish%20Law Rabbi Jachter] quoting Rav Moshe D. Tendler and Rav Basri, since the original storeowners benefit from the newcomers. Rabbi Aryeh Lebowitz ([http://www.yutorah.org/lectures/lecture.cfm/736064/rabbi-aryeh-lebowitz/hasagas-gevul-unfair-competition/ Hasagas Gevul - Unfair Competition on Yutorah]) brings the same argument. </ref> | ||
#Competition is not limited when non-Jews are not observing | |||
==Stealing Clients or Employees== | ==Stealing Clients or Employees== | ||
