Nowadays — especially considering the important role that marketing and good PR play in running a business — entrepreneurs pay great attention to the reputation of the company they manage, as well as its good name, both among business partners and online. Therefore, it is extremely important to know that in cases where false information about an entrepreneur is spread, there are specific legal mechanisms available to defend against this.
The definition of an act of unfair competition can be found in Article 3(1) of the Act of April 16, 1993, on Combating Unfair Competition (u.z.n.k.). According to this provision, an act of unfair competition is any action contrary to the law or good practices that threatens or infringes upon the interests of another entrepreneur or customer. Furthermore, pursuant to Article 14(1) of the Act, an act of unfair competition includes the dissemination of false or misleading information about oneself, another entrepreneur, or a company, with the intent to gain an advantage or cause harm. This particularly concerns false or misleading information regarding:
- the persons managing the enterprise,
- the goods produced or services provided,
- the prices applied,
- the economic or legal situation.
The cited provision contains an open-ended list of information that, when false or misleading, is disseminated to gain an advantage or cause harm to an entrepreneur. Consequently, any false or misleading information (provided it is disseminated with the intent to gain an advantage or cause harm) meets the criteria set out in Article 14 of the Act on Combating Unfair Competition.
Importantly, case law emphasizes that causing harm or gaining an advantage does not have to be the direct aim of the perpetrator’s actions. According to the judgment of the Warsaw Court of Appeal dated July 6, 2018 (case no. VII Aga 341/18, SIP Legalis no. 1822166): “The scope of application of Article 14 of the Act of April 16, 1993, on Combating Unfair Competition (consolidated text: Journal of Laws 2018, item 419, as amended) includes not only acts committed with direct intent, but also situations where the perpetrator merely accepted the consequences of their actions, and causing harm or gaining an advantage was not their direct objective, as the action was actually directed towards something else.”
Thus, an example of the described act of unfair competition would include, among others, spreading false information among business partners about the financial condition and solvency of another entrepreneur with the aim of gaining a financial advantage by taking over cooperation with those partners and thereby depriving the other entrepreneur of part of their clientele. Another example would be disseminating false information about the quality of products or services provided, particularly informing partners negatively about the properties of products offered by a competing entrepreneur without any supporting research or analysis, with the intention of harming the competitor. An act of unfair competition would also include spreading false information about oneself, for example by using unauthorized titles or unreliable research and analysis results, in order to increase the attractiveness of one’s offer and thereby strengthen competitiveness in the market.
Violation of the entrepreneur’s good reputation vs. violation of their personal rights
The dissemination of false information about a business very often involves harming its good reputation and established market position — which, in turn, leads to a violation of its personal rights.
Among the catalogue of personal rights of legal persons, good reputation is especially included. In turn, the good reputation of a legal person is connected with the opinion held about it by others due to the scope of its activities (Supreme Court ruling of June 9, 2005, III CK 622/04).
The concept of good reputation is closely linked to the notion of a company’s renown. This, in turn, is understood as the totality of positive perceptions and evaluations by consumers regarding the company’s products (Court of Appeal in Warsaw ruling of December 19, 1995, I ACr 1013/95). Violation of this personal right may occur through false statements that attribute improper conduct to the company or cause a loss of trust in the company. For example, in its ruling of November 14, 1986 (II CR 295/86), the Supreme Court recognized that a business operating a higher education institution can only achieve its educational goals if it possesses the appropriate educational and moral authority.
In turn, in the judgment of January 13, 2012 (I CSK 790/10), the Supreme Court indicated that the violation of an entrepreneur’s personal rights may also occur through the dissemination of false information or derogatory assessments of the entrepreneur’s employees.
Protection of the entrepreneur – what measures?
Article 26 of the Act on Combating Unfair Competition (uznk) establishes two offenses: the dissemination of false or misleading information with the intent to harm an entrepreneur (defamation) and the dissemination of such information to achieve material or personal gain (unfair promotion).
The provisions of Article 26 of the Act on Combating Unfair Competition (uznk) provide for penalties of arrest or fines. The arrest penalty is imposed for a period ranging from 5 to 30 days. The fine is monetary, ranging from 20 to 5,000 PLN. The specific penalty depends on the circumstances of the case, including, in the case of a fine, the financial situation of the offender.
In the case of overlap with the provisions of the Penal Code, the perpetrator must take into account the possibility of a prison sentence of up to one year (in situations where defamatory information was disseminated through mass media). Moreover, a conviction for such an offense results in a criminal record entry, which in many cases can pose a significant problem.
An entrepreneur who has been subjected to an act of unfair competition is also entitled to appropriate legal remedies provided in Article 18(1) of the Act. These include claims for:
- cessation of unlawful activities,
- removal of the effects of these actions,
- submission of a specific statement,
- reparation of the damage caused,
- return of unjustly obtained benefits, as well as,
- payment of an appropriate sum of money for a specified social purpose, if the act of unfair competition was committed with fault.
These claims are subject to a statute of limitations of three years, and the limitation period begins separately for each violation (Article 20(1) of the Act on Combating Unfair Competition), which is worth remembering when considering taking action.
Do you have any questions? Have your personal rights as an entrepreneur been violated? Have false statements been spread about your business?
Feel free to contact us!
Attorney Aleksandra Diskau adiskau@ajlaw.pl