Unfair competition refers to all dishonest or fraudulent behavior that occurs within a trade environment. The term, which comes from intellectual property law, is most commonly used for the imitation or counterfeiting of a product by misleading the public to believe that a false product is the real deal.
One consequence of unfair competition is that the practice can damage the brand name of a product through no fault of the legitimate company. In many states, unfair competition laws have been passed so as to protect businesses and also consumers from buying a product worth less than advertised. Unfair competition covers stealing trade secrets from a rival company and also exaggerating the claims of the benefits of a product.