UNFAIR PRACTICES ACT I UNFAIR COMPETITION LAW I ANTITRUST LAWS I BUSINESS FRAUD I CORPORATE FRAUD I CALIFORNIA UNFAIR COMPETITION LAW – Producers Engaged in Price Fixing Drive out Competition in Violation of California Unfair Practices Act and Unfair Competition Laws

UNFAIR PRACTICES ACT I UNFAIR COMPETITION LAW I ANTITRUST LAWS I BUSINESS FRAUD I CORPORATE FRAUD I CALIFORNIA UNFAIR COMPETITION LAW – Producers Engaged in Price Fixing Drive out Competition in Violation of California Unfair Practices Act and Unfair Competition Laws

June 24, 2021

Unfair Practices Act and Unfair Competition Laws

The Unfair Practices Act and Unfair Competition Laws are California State laws designed and adopted to protect consumers against unfair and deceptive business practices. These state consumer protection laws, similar to federal antitrust laws reprimand and prohibit businesses and corporations from predatory business practices and unscrupulous corporate actions.

Unfair Trade Practices – Unfair Practices Act

Unfair Trade Practices, are discussed in the Unfair Practices Act codified in California Business and Professions code § 17001 which states: “[t]he Legislature declares that the purpose of this chapter is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting unfair, dishonest, deceptive, destructive, fraudulent and discriminatory practices by which fair and honest competition is destroyed or prevented.”

Similar to the motivations behind Federal Antitrust Laws, the California Unfair Trade Practices Act is geared to preserve and promote competition for the benefit of consumers. With more competition in the market, products and services become more accessible, safer and foster innovation for the benefit of the public.

California Business and Professions Code § 17043 codifies this concept “[i]t is unlawful for any person engaged in business within this State to sell any article or product at less than the cost thereof to such vendor, or to give away any article or product, for the purpose of injuring competitors or destroying competition.” Similar to antitrust laws prohibiting predatory pricing and price fixing; this code section bans unscrupulous corporation actions geared to unjustly ousting competition with the sole intention of monopolizing in the future.

False Advertisement – Unfair Advertisement

False advertisement laws, which are part of the California Unfair Practices Act includes state laws which reprimand and protect consumers from false and deceptive advertisements. California Business and Professions Code § 17200 states “… unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising”

Unfair Trade Practices that violate California Unfair Competition Laws:

Unfair and deceptive trade practices that violate consumer protection laws, are subject to judicial redress. While it is impossible to list every situation, some examples of unfair business practices include:

  • Deceptive or fraudulent actions that cause injuries to consumers;
  • False representation of a goods and services;
  • Fraudulent gift or prize offers;
  • Non-compliance with manufacturing standards;
  • False Advertising;
  • Unfair Advertisements which include incorrect pricing, fake endorsements, false statements, deceptive guarantees or exaggerated performance descriptions;
  • Deceptive Pricing;
  • Unfair Sales practices such a “Bait and Switch” where a business advertises an item for a low price with the intent of selling another item;
  • Predatory Pricing;
  • Fix prices;
  • Price Fixing;
  • Rig bids;
  • Market Division;

Price Fixing a Case Study

CASE STUDY: California Concrete Supplier Prevails in its Unfair Competition Claim against Six Cement Producers involved in Price Fixing to Eliminate Independent Suppliers

E.W. French & Sons, Inc (French) supplied ready-mix concrete in Southern California. French began its business in 1954 in Hawthorne, California and depended on six cement producers to manufacture their product. After 22 years of business, French shut their doors because they were ousted from the market.  The six cement producers which French relied upon to run their business, conspired to eliminate small independent concrete suppliers such as French. The alleged conspiracy involved price fixing. Specifically the six large cement producers conspired by fixing a high price for independent producers such as French and provided discounts for large integrated producers of concrete who were owned or controlled by the six cement companies.

The underlying causes of action brought forth by French included violations of the Federal Sherman Act, Federal Clayton Act and two conspiracies in violation of California’s unfair competition laws and intentional interference with French’s prospective business advantage. After 20 years of prolonged litigation the case finally settled in favor of the plaintiff.

    • W. French & Sons, Inc. v. General Portland Inc., 885 F.2d 1392 (1989); Aug. 31, 1989 · United States Court of Appeals for the Ninth Circuit · Nos. 85-6573, 85-6606; 885 F.2d 1392

Victim of an Antitrust Violation or Unfair Competition?

If you, your business or corporation has suffered a harm as a result of predatory pricing, price fixing or other unfair competition practices, learn your rights.  We encourage you to contact our offices at 619-432-5145 for a free consultation with one of our antitrust lawyers and unfair competition attorneys.

    Diana Legal