unfair competition

  • July 30, 2012

    by Nicole Flatow

    Large-scale theft of information technology and intellectual property is becoming an increasingly serious problem for U.S. manufacturers competing in the global market, requiring new and better mechanisms for enforcement, according to a new ACS Issue Brief.

    In 2009, for every $100 worth of legitimate software sold, an additional $75 of unlicensed software “also made its way into the market.” And in 2010, the estimated value of stolen software spiked 14 percent.

    This rate of theft has a debilitating impact on businesses operating legally and seriously hampers competition, American University law professor Andrew F. Popper explains in his Issue Brief, “Beneficiaries of Misconduct: A Direct Approach to IT Theft.”

    “Companies profiting from stolen IT are not just free-riding on the successes of those who design and produce the products and ideas that drive the U.S. economy—they are destabilizing the pricing market and distorting lawful competition,” Popper writes.

    To tackle this problem, enforcement should directly address the harms this theft imposes on the competitive market through both state and federal unfair competition mechanisms, Popper asserts.

  • April 3, 2012

    by Nicole Flatow

    Responding to the concerns of 39 attorneys general over the impact of piracy on the U.S. manufacturing industry, a bipartisan group of senators has asked the Federal Trade Commission to “use all tools at your disposal to fight the theft of and use of stolen American manufacturing information technology (IT) and intellectual property (IP).”

    The request comes in response to a November letter from the National Association of Attorneys General that asked the FTC to help the AGs combat piracy by deploying a section of the Federal Trade Commission Act that prohibits unfair methods of competition.

    “Competition is the bedrock of free enterprise,” they write. “Competition is unfairly distorted, however, when a manufacturer gains a cost advantage by using stolen information technology, whether in its business operations or manufacturing processes. It offends our sense of fairness when such wrongdoers reap commercial advantage from their illegal acts.”