The unfair competition is when the merchant’s activity is being done by using illegal procedures, or in conflict with the normal commercial usages.

The merchants are obliged to perform their activity correctly, according with honest usages, by respecting the consumers interests, and also by respecting the honest competition requests.

The law 11/1991, with the modifications and the additions brought by through the law 298/2001 regarding the unfair competition, mentions in the 5’th article the facts which are illegal. Among these, we can enumerate, “the usage of a firm, a logo, the usage of special designations, or packs, for causing confusion, among them, and the ones used legally by a different merchant;  producing in any way, importing or exporting, depositing, applying for sale or selling merchandise with false information about invention patents, about the origins and the characteristics of the merchandise, and also regarding the name of the producer or the merchant, with the purpose of confusing other merchants, or beneficiaries” etc.

The Paris Convention, for protecting the industrial property mentions in article 10 bis 2, that the unfair competition act is “any competition act which contradicts honest practice in industrial or commercial matters.”

The Article 10 Bis 3 from the Convention provides that it should be forbidden: “any act made in order to create confusion, by any means with a competitors products; the indications or affirmations used in commercial purposes, meant to induce error among the public, about the nature, the fabrication, the characteristics, the usage aptitude, or the quantity of the merchandise”.

Among the illegal procedures we can enumerate “the snowball method” and the “prizes and gifts method”.

The snowball method is the procedure where a merchant assures the deliverance of a merchandise or the implementation of a performance, definitely in the advantage of the client, but under the condition for the client to bring other buyers, with whom the merchant will sign similar deals, or contracts.

This procedure is not honest and it causes damage to the other merchants, and also to the consumers, because they have been fed with the illusion that only this way they will receive merchandise or other services having conditions in their advantage.

Concluding contracts where the buyer would receive a prize,  which exclusively depends of a luck draw, or hazard, is another contravention.

In principle, any merchant is free to offer gifts to his clients, but attracting clients through this procedure is very less in the interest of the consumers, because the prize depends only on hazard, which makes this procedure dishonest.

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