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False Advertising and Illegal Business Practices Explained

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(Part 1 of 3)

The words Consumer protection shot with artistic selective focus.

Have you ever bought a product that did not live up to your expectations? Most consumers have gotten caught up in flashy advertising tactics at one time or another, buying a good or service that may not have ended up being nearly as useful as it appeared. But when do advertising tactics and business practices become possible illegal activity? California has multiple statutes designed to protect consumers.

First is the California Business and Professions Code § 17200[1], termed California’s Unfair Competition Law (“UCL”):

Unfair competition shall mean and include any unlawful, unfair or fraudulent business act or  practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by  Chapter 1 of Part 3 of Division 7 of the Business and Professions Code (which outlines false advertising in regards to various products).

Actions under the UCL for injunctions and restitution may be brought by a prosecuting authority or by private persons acting for themselves or the general public. The language is purposefully broad, allowing the definitions of ‘unlawful, ‘unfair’ and ‘fraudulent’ to evolve with business practices.

  • The unlawful prong allows anything that violates another law and that can be defined as a business practice to be a per se violation of the UCL.[2]
  • The unfair prong is very broad. As far as cases between competitors, the California Supreme Court has defined unfair as: “conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effect are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.”[3]
  • And a business practice is considered fraudulent if “members of the public are likely to be deceived” by the practice.[4]

This statute has been used in a variety of contexts. If you think you have a claim under California’s Unfair Competition Law, contact an attorney experienced in consumer fraud or false advertising.

[1] Cal. Bus. & Prof. Code § 17200.

[2] Regarding legal claims, a per se violation refers to something that is illegal in and of itself, not requiring further proof.

[3] Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999).

[4] Bank of the W. v. Superior Court, 2 Cal. 4th 1254, 1267 (1992).

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