Freedom of trade and competition is an inalienable principle in Monaco. However, the courts do not hesitate to punish abusive behavior that distorts competition.
Under Monegasque law, an act of unfair competition is defined as any behavior that departs from the normal conduct of a prudent professional and which, by distorting the balance in competitive relations, breaks the equality of opportunity between competitors in a free economy system.
What are the main unfair practices?
Unfair practices can take a variety of forms, although Monegasque law does not list the acts that are likely to be irregular.
Examples include free riding, disparagement, misleading advertising, customer and staff poaching.
Free riding consists in following in a company's footsteps, taking undue advantage of its investments and reputation.
Disparagement is a malicious statement made against a competitor with the aim of diverting its clients, or more generally, to undermine it.
Advertising is misleading when the allegations, indications or presentations are false or likely to mislead the public.
Depending on the context and conditions, poaching a competitor's employee can also constitute an act of unfair competition.
How to put a stop to unlawful behavior?
A formal notice, followed by an action for unfair competition before the Monegasque courts, enables the perpetrator of a fault committed in the exercise of their activity to obtain compensation for the damage their unfairness has caused to another economic agent.
Compensation may take the form of financial compensation or, more broadly, of any measures required to put an end to the disturbance caused.
Based on tortious liability under article 1229 of the Civil Code, an action for unfair competition requires proof of a fault - characterized by the use of an unfair act, the existence of a prejudice, and a certain causal link between the fault and the damage claimed.
Importantly, Monegasque courts do not require an element of intent, which means that a person can be guilty of unfair competition without intending to do so, as long as the wrongful act has the object or effect of causing competitive damage.
In an increasingly competitive environment, companies are vigilant, and Monegasque courts are now seeing a growing number of unfair competition actions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
