Unfair competition

English

Newsletter

Published 07 September 2020
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The Norwegian Marketing Control Act section 25 comprises the general clause concerning unfair competition: "No act shall be performed in the course of trade which conflicts with good business practice among traders."

The wording of the general clause is open to interpretations, as parties would usually disagree with respect to the threshold for "good business practice". Thus, the general clause is often subject to disputes between parties if a business partnership has stranded or if a party believes that the other party has acted in an unfair manner.

The Norwegian Council dealing with unfair marketing practices (in Norwegian: Næringslivets Konkurranseutvalg, hereafter referred to as "NKU") has provided several guiding statements in disputes between professionals relating to acts of unfair competition.

NKU issued a statement on 1 July 2020 in case no. NKU-2020-5 between the Norwegian bank DNB Bank ASA ("DNB") and the startup company SHE Community AS ("SHE"). The statement provides guidance with respect to unfair competition issues that might arise at an early stage of when the parties are discussing a potential business collaboration, even though the business collaboration is never materialised.

SHE is a startup company focusing on equality and women's' awareness around investments, especially by using "SHE Invests" as a trademark. DNB had launched a concept called "huninvesterer", which translates to "sheinvests". Prior to DNB's launch, there had been some cooperation between the parties concerning conferences and other activities, as well as a dialogue concerning a collaboration agreement relating to "SHE Invests". DNB decided not to proceed with the collaboration agreement and instead launched its own concept.

The matter also concerned SHE's claim that DNB had used SHE's trademarks in violation of the Norwegian Marketing Control Act section 30. NKU concluded that there was no violation of section 30, as "SHE Invests" is descriptive and therefore not a protected trademark.

However, with respect to the general clause in the Norwegian Marketing Control Act section 25, NKU concluded that DNB had acted in violation of "good business practice".

The short time between DNB's refusal to enter into a collaboration agreement and the launch of "huninvesterer" meant that DNB had a special bond of loyalty towards SHE when choosing its own slogan. Furthermore, NKU emphasised that DNB is a large and well-run bank that quickly would gain the attention in the market, whereas SHE, as a startup company previously cooperating with DNB, would not be able to continue its use of "SHE Invests" in competition with DNB.

NKU also stated that "SHE Invests" and "huninvesterer" share the same meaning. It should therefore be clear to DNB that SHE's clientele could associate "huninvesterer" to SHE's business. The message and the business is overlapping, even if DNB's concept has a broader scope than SHE's concept. The fact that DNB perceives its own concept as part of its social responsibility, does not raise the threshold for criticism under the Norwegian Marketing Control Act. NKU concludes that DNB's concept is, above all, about marketing DNB's services – even if it seems to have an ideal edge as well.

Main lessons to be learned from NKU's statement:

  1. There is a risk of limiting your own options when discussing potential collaboration arrangements with other parties.
  2. Special bonds of loyalty would exist even if the collaboration does not materialise and the parties go separate ways.
  3. Ensure to distance yourself from the other party's slogans etc. if you decide to launch a concept similar to the one you discussed with the other party.