An unfair-competition cease-and-desist letter is a serious legal warning. Anyone who ignores it or signs the enclosed undertaking without review risks economic damage that exceeds the original demand many times over.
What a UWG cease-and-desist means
A cease-and-desist under the Austrian Federal Act against Unfair Competition (UWG) — also referred to as unfair-competition law — accuses you of conduct relevant under unfair-competition law — for example misleading advertising, comparative advertising outside the limits of permissibility, hidden advertising, aggressive commercial practices or other unfair practices such as breach of law, customer poaching, obstruction or exploitation of third-party performance. The sender’s aim is the out-of-court resolution of the complaint — with a cease-and-desist undertaking and reimbursement of costs.
The most common mistakes after receipt
- Leaving the cease-and-desist unanswered or ignoring it
- Signing a pre-formulated undertaking without review
- Publicly commenting on the content of the cease-and-desist
- Simply letting the challenged advertising continue
- Negotiating with the other side on your own and providing further documents to the other side in the process
What you must do immediately
Contact a lawyer immediately so they can check whether the cease-and-desist is justified against the factual background and whether a demanded undertaking is not too far-reaching. Based on the result of the review, the further strategy should then be defined. This can range from rejecting the request through to submitting a modified cease-and-desist undertaking and immediately suspending the challenged advertising activity.
Once signed, a cease-and-desist undertaking is in principle binding — and cannot be unilaterally revoked. It often binds you for years, possibly also your legal successors.
Modified undertaking as protection
The enclosed undertaking is often formulated to your disadvantage: too wide a scope of protection, excessive contractual penalty, unfavourable cost consequences. A lawyer-drafted modified cease-and-desist undertaking limits the cease-and-desist claim to the actually challenged conduct and secures it appropriately so that the so-called risk of repetition lapses.
Defence strategies
Not every UWG cease-and-desist is justified. Common defence approaches:
- Lack of standing — only certain persons and associations may pursue unfair-competition breaches
- Permissible comparative advertising — if the UWG conditions are met
- Lack of market appreciability
- Defence based on a tenable legal view
Deadlines are not coincidence
Cease-and-desist deadlines of 7 to 14 days are deliberately short — they are meant to create pressure and prevent reflection. The same applies to you: react fast, but with consideration — don’t sign in panic, but rather have the cease-and-desist reviewed.
This article is for general information and does not constitute legal advice in any specific case.
