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Competition in Hallachah
(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 לימא מסייע ליה מרחיקים מצודת הדג מן הדג כמלא ריצת הדג וכמה אמר רבה בר רב הונא עד פרסה שאני דגים דיהבי סייארא א"ל רבינא לרבא לימא רב הונא דאמר כרבי יהודה דתנן רבי יהודה אומר לא יחלק חנוני קליות ואגוזין לתינוקות מפני שמרגילן אצלו וחכמים מתירין אפילו תימא רבנן עד כאן לא פליגי רבנן עליה דרבי יהודה התם אלא דאמר ליה אנא קמפלגינא אמגוזי את פלוג שיוסקי אבל הכא אפילו רבנן מודו דא"ל קא פסקת ליה לחיותי מיתיבי עושה אדם חנות בצד חנותו של חבירו ומרחץ בצד מרחצו של חבירו ואינו יכול למחות בידו מפני שיכול לומר לו אתה עושה בתוך שלך ואני עושה בתוך שלי תנאי היא דתניא כופין בני מבואות זה את זה שלא להושיב ביניהן לא חייט ולא בורסקי ולא מלמד תינוקות ולא אחד מבני בעלי אומניות ולשכנו אינו כופיהו רשב"ג אומר אף לשכנו כופיהו 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 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. The Gemara suggests: Let us say that a baraita supports his opinion: One must distance fish traps from fish, i.e., from other fish traps, as far as the fish travels, i.e., the distance from which the fish will travel. The Gemara asks: And how much is this distance? Rabba bar Rav Huna says: Up to a parasang [parsa]. This indicates that one must distance himself from the place where another has established his business. The Gemara responds that this is no proof: Perhaps fish are different, as they look around. One fish explores the area ahead of the others, indicating to them where to go. Once they encounter the first trap they will not approach the second. Ravina said to Rava: Shall we say that Rav Huna spoke in accordance with the opinion of Rabbi Yehuda? As we learned in a mishna (Bava Metzia 60a): Rabbi Yehuda says: A storekeeper may not hand out toasted grain and nuts to children who patronize his store, due to the fact that he thereby accustoms them to come to him at the expense of competing storekeepers. And the Rabbis permit doing so. This indicates that according to the opinion of Rabbi Yehuda, all forms of competition are prohibited, which would include the scenario concerning the mill. The Gemara rejects this suggestion: You may even say that Rav Huna holds in accordance with the opinion of the Rabbis. The Rabbis disagree with Rabbi Yehuda only there, as the storekeeper can say to his competitor: If I distribute walnuts, you can distribute almonds [shiyuskei]. But here, with regard to a resident of an alleyway who sets up a mill in that alleyway where another mill already exists, even the Rabbis concede that the owner of the first mill can say to him: You are disrupting my livelihood, as beforehand whoever required grinding came to me, and you have provided them with another option. The Gemara raises an objection from a baraita: A man may establish a shop alongside the shop of another, and a bathhouse alongside the bathhouse of another, and the other cannot protest, because the newcomer can say to him: You operate in your space, and I operate in my space. The Gemara answers: This entire matter is a dispute between tanna’im, as it is taught in a baraita: The residents of an alleyway can compel one another to agree not to allow among them in that alleyway a tailor, a tanner, a teacher of children, nor any type of craftsman. They can bar outside craftsmen from plying their trade in that alleyway. But one cannot compel his neighbor, i.e., one who already lives in the alleyway, to refrain from practicing a particular occupation there. Rabban Shimon ben Gamliel says: One can even compel his neighbor not to conduct such work in the alleyway. Rav Huna holds in accordance with the opinion of Rabban Shimon ben Gamliel. 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. But if he pays the tax of that first town, he cannot prevent him from doing business there, as he too is considered a resident of the town. The resident of an alleyway cannot prevent a resident of his alleyway from practicing a particular trade there, in accordance with the opinion of the Rabbis in the baraita, and contrary to the opinion of Rabban Shimon ben Gamliel.

(ח) כּוֹפִין בְּנֵי מָבוֹי זֶה אֶת זֶה שֶׁלֹּא לְהוֹשִׁיב בֵּינֵיהֶן לֹא חַיָּט וְלֹא בּוּרְסִי וְלֹא אֶחָד מִבַּעֲלֵי אֻמָּנֻיּוֹת. הָיָה שָׁם בַּמָּבוֹי אֶחָד מִבְּנֵי מָבוֹי אֻמָּן וְלֹא מִחוּ בּוֹ. אוֹ שֶׁהָיְתָה שָׁם מֶרְחָץ אוֹ חֲנוּת אוֹ רֵחַיִם וּבָא חֲבֵרוֹ וְעָשָׂה מֶרְחָץ אַחֶרֶת כְּנֶגְדּוֹ אוֹ טָחוֹן אַחֶרֶת. אֵינוֹ יָכוֹל לְמָנְעוֹ וְלוֹמַר לוֹ אַתָּה פּוֹסֵק חַיַּי. וַאֲפִלּוּ הָיָה מִבְּנֵי מָבוֹי אַחֵר אֵינָן יְכוֹלִין לְמָנְעוֹ שֶׁהֲרֵי יֵשׁ בֵּינֵיהֶם אוֹתָהּ אֻמָּנוּת. אֲבָל 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:

The inhabitants of a alley can compel each other to prevent a tailor, a leather craftsman or any other craftsman from opening a business in the alley.

If a craftsman lived in the alley, and no protest was lodged against his practice of his craft, or there was a bathhouse, a store or a mill in the lane, and another person came and built another bathhouse opposite it or built another mill, the owner of the first establishment cannot prevent him, claiming: "You are destroying my livelihood."This applies even if he comes from another alley, for this trade is already practiced in this alley.

If, however, a stranger from another city comes to establish a store next to a person's store, or a bathhouse next to this person's bathhouse, they can prevent him from doing so. If, however, he pays the head-tax of the king together with them, they cannot prevent him from establishing his business.

Gray Matter, Jactor, Rabbi Chaim
The Aviasaf defines unfair competition in a most broad manner. He forbids opening a store at the entrance to a dead-end alley if a similar establishment is already located farther within the dead-end alley. Such competition is unfair, for it will definitely ruin the original shopkeeper's business. Potential customers will see the new store upon entering the dead-end alley without ever noticing the other establishment farther in.
In a responsum (10), the Rama adjudicates a famous sixteenth-century dispute between two Italian publishers who both printed editions of the Rambam's Mishneh Torah. The one who published it first objected to the existence of a rival edition of the Mishneh Torah. The Rama rules against the second publisher, reasoning (based on the Aviasaf's ruling) that all Amoraim forbid opening a store if it will clearly ruin the original entrepreneur's business. The Rama thus concludes that the second publisher should not be patronized, as he was unfairly ruining the original publisher's livelihood.
Mas'at Binyamin addresses a town that was permitted to have only one store of a particular type. One such store already existed, and someone wanted to start an identical one. The Mas'at Binyamin writes that even the lenient Talmudic opinion of Rav Huna the son of Rav Yehoshua forbids the new competitor from opening. Since the law prohibits 2 stores of one type in the same town there is not even a theoretical chance of both stores surviving, the new storeowner was clearly damaging the incumbent (bari hezeika).
The Rashba (Teshuvot 3:83) also sets limits on free enterprise. He extrapolates from the Gemara's case of the fishing nets that, while one may open a rival business, he may not actively pursue people who are known to be regular customers of the first proprietor. Just as one who places his net in front of the first net swipes fish that were heading straight toward it, this type of advertising steals customers who would have undoubtedly bought from the original proprietor.
והייתי להם לאלהים. מנהיג ענינם בלתי אמצעי, ומאותות השמים לא יחתו, להיותם נכבדים לפני יותר מן השמים שהנהגתם על ידי מניעיהם, ומזה יתחייב נצחיותם:
והייתי להם לאלוקים, and I will supervise their affairs without resorting to an intermediary. They will have no reason to be afraid of what astrology portends, seeing that they (the Jewish people) are far more honoured by Me than are the celestial planets, etc. The very fact that I guide others’ fate only by means of agents, intermediaries, testifies to the eternal existence of the Jewish people.