In business, the objective is usually to gain an advantage over competitors and thereby reap profits. But that doesn’t mean every form of competition in the business world is permitted. Certain practices, which fall in the category of unfair competition or unfair trade practices, run afoul of the law. A company that is found liable for unfair competition or trade practices can face significant monetary damages. Whether you are the company accused of such practices, or another is engaging in them, you need seasoned legal counsel. Talk to the business law attorneys of Aeton Law Partners today.
How Connecticut defines unfair competition and unfair trade practices
Both unfair competition and unfair and deceptive business acts are prohibited in Connecticut. The Unfair Trade Practices Act (CUTPA) provides a common right of action against businesses engaged in these practices. Any person who loses money or property due to unfair competition can pursue legal action under the CUTPA. “Person” is defined as a:
- Natural person
- Corporation
- Limited liability company
- Trust
- Partnership
- Incorporated or unincorporated association
- Any other legal entity
The Connecticut Department of Consumer Protection (DCP), which has jurisdiction over CUTPA claims, has issued regulations defining types of prohibited practices. Because the word “unfair” is fairly broad, it’s best to consult an attorney if you have questions about specific actions. The regulations maintained by DCP concern a broad array of matters, such as:
- Pricing
- Refunds
- Advertising (e.g. “bait and switch”)
- Product disclosures and guarantees
- Representations made about products
However, a practice does not have to be expressly prohibited by the CUTPA for someone to bring an action.
What enforcement actions does the DCP have?
DCP has authority under the CUTPA to conduct investigations related to alleged unfair competition. To that end, DCP has the power to:
- Issue subpoenas, administer oaths, and conduct hearings
- Enter and investigate any business establishment at reasonable times
- Check business invoices and records
- Have access to and copy business documents
- Execute investigative demands
- Take certain other investigatory actions
If a hearing is conducted and violations are found, the DCP has a number of available remedies. For instance, a temporary restraining order or permanent injunction may be sought. These measures can be appealed to the superior court. The DCP can also issue an award for damages and court fees. It may levy penalties of up to $5,000 for willful violations of the CUTPA. If a business violates a restraining order, penalties could be as high as $25,000.
Punitive damages are also possible under the provisions of the CUTPA. Courts have the discretion to impose such damages, which are designed to punish especially egregious conduct. However, CUTA does not establish the specific circumstances under which such damages may be awarded.
Private right of action for unfair competition
Engaging in unfair business practices might not land you in trouble with DCP. It could open the door to a private right of action, however. Any person may pursue actual damages against a business that has practiced unfair competition.
Has Your Business Been Accused Of Unfair Practices?
Unfair and deceptive trade practices, and unfair competition, could cost your business. If your company has been charged with CUTPA violations, you will need dedicated legal representation. Our firm can also help if another business is violating your rights under CUTPA. To learn more about the legal services we provide to Connecticut businesses, call Aeton Law Partners today.