Luxembourg: unfair competition, business abuse and commercial parasitism

The misappropriation of customers constitutes an act of unfair competition.

It is one of the main faults on which unfair competition proceedings may be based. This practice disorganises the competitor's business by capturing its clientele through unfair means.

In other words, it is a “theft” of customers, as in this case pleaded by Maître DEKHAR before the Luxembourg Criminal Court. A former employee was summoned directly by her ex-employer (represented by Maître DEKHAR) for having misappropriated the customer file for the benefit of her new employer and direct competitor:

Prosecuted for breach of professional secrecy: “She siphoned off the customer file” (lequotidien.lu, in French)

The four types of unfair competition

Parasitism

A competitor takes advantage of another's work and know-how in order to divert the clientele of a targeted company.

Example: creating a website almost identical to a competitor's.

Imitation

A company causes confusion (intentionally or not) in customers' minds by using a logo or shop front similar to that of another company operating in the same field.

Disorganisation

Prospecting a competitor's customers, spying on it to learn its secret manufacturing methods, or poaching its staff.

When an employee leaves a company to work for a competitor, he or she should no longer be covered by the non-competition clause in the employment contract. Otherwise, the company that poached the employee may be guilty of disorganisation.

Denigration

A company or an employee publicly criticises the services or products, management or employees of the company.

Denigration also applies indirectly when a company openly claims to be the only one able to provide a certain service or to possess a certain quality.

#UnfairCompetition #Parasitism #CommercialLaw #BusinessLaw #Luxembourg

Maître Saliha DEKHAR

Étude SD LAW – Luxembourg