Business Halacha: “Switch Over” Phone Campaigns

Question: I operate a long-distance telecommunication company. Verizon, Sprint, and MCI are constantly running campaigns aimed at my clients and offering incentives for them to “switch over.” May I run a similar campaign to attract new clients, which will also target customers of another Jewish-owned telecommunication company?

Answer: We learned last week the law of “ma’arufya,” which restricts the right to target another company’s established clients. However, this law does not seem to apply to the current long-distance telecommunication industry.

In this field, there are ongoing battles over clients, and constant offers to switch from one company to another. For this reason, no company has the expectation that its current clients will necessarily stay with them.

Certainly, when there is consistent client competition by non-Jewish companies, it is not possible to restrict a Jew from competing, since restricting him will not protect the other Jewish business anyway. (See Rama C.M. 156:5 and Pischei Choshen, Geneivah ch. 9 n. 20)

 Note: Last week, we dealt with the case of someone who “obtained access” to his competitor’s client base. A reader correctly pointed out that this information is usually highly confidential and there are many ethical and legal issues in obtaining or divulging such information.

A possible scenario, which would not involve unethical activity, is when a person with knowledge of the clients becomes a partner in a “start-up” and already has first-hand knowledge of the customers. Another possibility is that a distributor for one company, with established clients, begins distributing for another company that wants to introduce its products to those same customers. 

Authored by Rabbi Meir Orlian

These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute (www.businesshalacha.com) and is under the auspices of Rav Chaim Kohn.

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