Distribution of leaflets encouraging clients to change a service provider is an act of unfair competition

By the judgment of 9th May 2016, the Appeals Court in Cracow resolved the dispute concerning distribution of promotional materials the content of which was aimed at convincing clients to give up telecommunications services offered and provided by another entrepreneur.

The entrepreneur whose interests had thus been threatened brought an action for discontinuation of activities which in his opinion constituted an act of unfair competition. Advertising materials had been distributed in the area where services of the same type had been already provided by the plaintiff and pointed to more advantageous conditions offered by the defendant. He had offered a special price of PLN 1 for the first three months of contract duration. Moreover, in the content of the advertisement  the company name had been directly mentioned under which the previous service provider had been active. In the opinion of the plaintiff, it had made clients erroneously believe that the companies providing advertised services had been merged together which, as a consequence, obliged them to conclude contracts with the new supplier providing services at more competitive prices. As a result of such practice, considerable number of clients had gone over to the new supplier which had led the financial situation of the plaintiff to become worse.

The Court of first instance did not find that the defendant’s conduct had violated the law. In its opinion, marketing and information activities involved in offering services for a nominal remuneration during a certain period of time is aimed at winning over new clients and not elimination of other suppliers providing services of the same type, and so such activities did not constitute an act of unfair competition.

However, the Appeals Court did not agree with such an opinion and in the judgment referred to herein found that although it can be said that offering services for a nominal remuneration during a certain period of time is aimed at winning over new clients, it is by no means possible to accept the view of the Court of first instance that such conduct does not include a desire to eliminate other entrepreneurs. Because the act committed by the company sued was in fact accompanied by a motive which was the aforementioned elimination. The defendant addressed its offer to a categorized group of clients –consumers who had contracts with another supplier (in particular to persons already being clients of the suing company). Therefore, in accordance with the view of the Appeals Court the conduct of the company sued has all features pointing out that the defendant committed an act of unfair competition.

  • Judgment of the Appeals Court in Cracow of 9th May 2016, file reference number I ACa 67/16

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