In general, Louisiana and the federal government support competition. In theory, competition spurs innovation, keeps costs down and promotes other benefits for consumers.
But this pro-competition approach doesn’t mean that anything goes in the marketplace. There are times when certain acts of competition go too far. This can hurt both consumers and businesses.
These are the policy considerations behind state and federal laws against unfair competition and unfair trade practices.
These types of laws first came about hundreds of years ago, and eventually led to the creation of whole bodies of law, including trademark protection, laws against false advertising and more.
In Louisiana, some of these concepts are embodied in the state’s Unfair Trade Practice and Consumer Protection Act. Passed in 1972 and based on the Federal Trade Commission Act, the Louisiana UTPCPA provides two paths for enforcing restrictions.
The first path is for the state. Louisiana agencies can take action against a business that they believe is breaking the law. The Consumer Protection Division is the primary agency involved in this type of action.
When doing so, the agency takes the business to court and asks the judge to issue an injunction that will stop the unfair trade practice. The court can also order the business to pay damages to others it has harmed. For instance, a business that illegally interfered with a competitor’s business may be ordered to compensate the competitor for the revenue it lost as a result of the interference.
It’s important to note that state agencies are primarily interested in the consumer protection aspect of the UTPCPA. If the alleged business practice is harming other businesses but not clearly causing harm to consumers, the state is less likely to get involved.
The second path is for a private cause of action. State law allows for an individual or business to file suit against another party it claims is illegally interfering with its business.
For instance, imagine that a food distributor is, without permission, labeling bottles of cheap hot sauce as though they were actually produced by a well-known hot sauce brand and selling them at a lower price. The hot sauce company claims that this unauthorized substitution is harming its business and files suit under the UTPCPA.
One important advantage of the private path is that plaintiffs can recover not only compensation for what they have lost (known as “actual damages”) but potentially much more, including court costs and attorney’s fees.