(יד) לֹ֤א תַסִּיג֙ גְּב֣וּל רֵֽעֲךָ֔ אֲשֶׁ֥ר גָּבְל֖וּ רִאשֹׁנִ֑ים בְּנַחֲלָֽתְךָ֙ אֲשֶׁ֣ר תִּנְחַ֔ל בָּאָ֕רֶץ אֲשֶׁר֙ ה' אֱלֹקֶ֔יךָ נֹתֵ֥ן לְךָ֖ לְרִשְׁתָּֽהּ׃ (ס)
(14) You shall not move your countryman’s landmarks, set up by previous generations, in the property that will be allotted to you in the land that the LORD your God is giving you to possess.
אמר רב הונא האי בר מבואה דאוקי ריחיא ואתא בר מבואה חבריה וקמוקי גביה דינא הוא דמעכב עילויה דא"ל קא פסקת ליה לחיותי ... אמר רב הונא בריה דרב יהושע פשיטא לי בר מתא אבר מתא אחריתי מצי מעכב ואי שייך בכרגא דהכא לא מצי מעכב בר מבואה אבר מבואה דנפשיה לא מצי מעכב
Rav Huna said: There was a certain resident of an alleyway who set up a mill in the alleyway and earned his living grinding grain for people. And subsequently another resident of the alleyway came and wished to set up a mill next to his. The halakha is that the first one may prevent him from doing so if he wishes, as he can say to him: You are disrupting my livelihood by taking my customers... Rav Huna, son of Rav Yehoshua, says: It is obvious to me that a resident of one town can prevent a resident of another town from establishing a similar business in the locale of the first individual. However, if he (the second mill owner) pays the tax of that town (just like the original owner), then the original owner cannot prevent competition from doing business there, as he too is considered a resident of the town.
(ח) גֵּר מִמְּדִינָה אַחֶרֶת שֶׁבָּא לַעֲשׂוֹת חֲנוּת בְּצַד חֲנוּתוֹ שֶׁל זֶה. אוֹ מֶרְחָץ מִצַּד מֶרְחָץ שֶׁל זֶה. יֵשׁ לָהֶן לְמָנְעוֹ. וְאִם הָיָה נוֹתֵן עִמָּהֶם מְנַת הַמֶּלֶךְ אֵינוֹ יָכוֹל לְמָנְעוֹ:
(8) A stranger from another country, who comes to open a shop or a bathhouse close to one that is there already, may well be prevented. But if he has contributed along with the other citizens toward payment of the royal tax, he cannot be prevented.
Hasagat Gevul: Economic Competition in Jewish Law by Rabbi Chaim Jachter
http://www.jlaw.com/Articles/hasagatgevul.html
Five Cases of Consensus
Although most issues of competition are subject to debate, there are at least five cases where nearly all authorities appear to agree.
I. Better Prices or Merchandise
The Rama rules that a new competitor may not be restricted if his prices or the quality of his merchandise are preferable for the consumers. If the old merchant was charging a high price, he explains, the new competitor may charge a more reasonable one. However, if the old merchant was charging a reasonable price, such that further lowering his price would prevent him from turning a profit, the new competitor may not open.
II. Necessary Monopolies
The Chatam Sofer rules that communities should ensure that industries which require monopoly protection (i.e., protection from competition) receive it. Rav Dr. Aaron Levine (Free Enterprises and Jewish Law, pp. 19-20) suggests that power companies and urban transportation are contemporary examples of enterprises that need monopoly protection in order to survive. Some may argue that basic Jewish service providers in small Jewish communities similarly need monopoly protection to survive.
III. Teaching Torah
The Gemara (Bava Batra 21b-22a) states that even Rav Huna permits unrestricted competition in the area of Torah education, since competition fosters improved Torah knowledge (kin'at sofrim tarbeh chochmah).
IV. Business Districts
Many contemporary authorities believe that a competing store occasionally enhances the business of the first store-owner. Under certain circumstances, the new store helps transform the area into a center for a certain type of businesses. Residents of Manhattan are familiar with garment districts, flower districts, furniture districts, and other similar commercial zones. Such areas attract large amounts of consumers, who spend more money than if they were patronizing a single store. Rav Moshe D. Tendler (in a lecture at Yeshiva University) and Rav Basri (personal communication) permit competition in such circumstances, as the original store-owners benefit from the newcomers.
V. Contemporary Neighborhoods
It should be noted that changing patterns in the geography of business impact halachic discussions of competition. Many businesses today do not cater exclusively to their local neighborhoods. For example, the Tel Aviv Beit Din has written that competition between insurance agents should not be restricted according to the distinction between local residents and outsiders, as the insurance industry is not a neighborhood-based field (Piskei Din Rabaniyim 6:3). Following this reasoning, geographic location would not limit stores that conduct much of their business through the World Wide Web.