Competition in the Digital Market: anti-competitive practices


Tablet show Google Search page
Companies have publicized their services and products in the digital market through sponsored links

With the development of business on the internet, companies began to use this resource to advertise their services and products, aiming to increase their market reach.


It is very common that the dissemination of services and products in the digital market takes place through the so-called sponsored link, a paid service, in which keywords are purchased on search sites, allowing the creation of advertisements made on pages related to the researched subject.


According to the Brazilian Electronic Commerce Association (ABComm), the Brazilian consumer is more attracted to online shopping each day. In the survey carried out last year, 47.9% of companies noticed an increase in its sales due to the promotion of their services and products through paid advertisements on social media, in particular.

Most of them use the advertisement Facebook tool, Facebook Ads (50.9%), followed by the Instagram tool (46.7%) and Google (27.9%). [1]


On the other side, the internet has become an easy place to commit acts of unfair competition. A sharp increase in complaints and lawsuits for plagiarism or parasitic competition has followed the growth of economic activities in the digital world.


Due to the "Marco Civil da Internet" (Brazilian Law 12.965 / 2014), hosting, connection or application providers are only required to provide user data if they receive a court order.

In the day-to-day practice, conduct of plagiarism or parasitic competition can remain for a long time without consequences for the offender of the victim company's rights.



Woman searching the internet
Cases of plagiarism and parasitic competition have increased with the growth of digital commerce

The big question, from this perspective, is the countless material and even moral damage suffered by the company that is being plagiarized or whose customers are dishonestly diverted by its market competitor. This occurs when a company uses the recognition and name of its competitor to attract customers to its business, for example.


Let us suppose the company "X" has had its clients diverted to company "Y", its direct competitor, due to Google's word sponsorship (Google Ad Words). In other words, company Y paid Google’s platform so that when consumers or potential consumers search for the name of company X, company Y appears first on the results page.


When the victim company realizes such conduct of its competitor and searches for the owner of the domain of the parasitic website to take the appropriate measures, in most cases, it comes to find the absence of name, tax identity number (CPF) and even e-mail that could identify the offender. Only the name of the provider is shown.


In this case, the company that is the victim of unfair competition has to take an urgent measure to request the provider's subpoena, so that the supplier provides the data of who is committing the act of unfair competition, and only then, the victim company can take the appropriate measures to cease the illegal conduct.


In the meantime, the victim company, temporarily unable to identify the offender, has probably already suffered irreparable civil damage due to unfair competition practiced, with no possibility of mitigating its losses.


Thus, unfair competition in the digital market has become more frequent and more complex to solve or mitigate. Market-leading companies need to pay greater attention to such impacts and adopt preventive measures.


[1] CloudCommerce: annual e-commerce report - 2019

Author



Caterina Formigoni Carvalho

Associate

Post-graduate student in Innovation Management and Digital Law, Fundação Instituto de Administração (FIA).

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