DIFFICULT MORAL QUESTIONS

Question 104: May businesses try to drive competitors out of business?

“Love your enemies” may be a law of Christian morality, but it is not easy to see how it applies to the owner of a business dealing with unprincipled competitors.

Having completed my education with an M.B.A., I recently inherited my father’s Chevrolet-Geo dealership in my home town. Toward the end, Dad let the business deteriorate, tolerating laziness by the two salesmen and poor work by the foreman and three mechanics in the shop. I replaced three of these people, got the others to shape up, and am gradually rebuilding the business by working hard to make sales and working personally as foreman of the shop, which now provides good and honest service at fair prices.

My most important competitors, located in a somewhat larger town nearby, are less than honest. They operate a franchise of a well-known national tire chain. They sell and install good tires, and they get other business by offering a deal on wheel balance and alignment that allows customers to have the job redone without an additional charge every five thousand miles as long as they own the car. But when customers return for that service, the manager talks them into unnecessary work—replacing perfectly good struts, relining brakes that are only half worn, and so on—by falsely claiming safety requires it.

I talked with the county prosecutor about the problem and worked out a plan with him to build a case against these competitors. A friend of mine who is a Ford dealer in town and I will check our records to identify our regular service customers who have not had wheel balancing or alignment done in two years and will discreetly ask some of them whether they have bought the deal at the dishonest service department. We will offer those who have a free safety inspection, to be made just before next taking his or her car for wheel alignment and balancing. If work of the kind involved is needed, we will do it at the competitors’ prices. If no work seems necessary, we will ask the customer to let the dishonest service department do whatever the manager there claims is necessary for safety; then, having kept careful records, we will help the customer file a complaint with the prosecutor.

To encourage cooperation by the customers we select, we plan to promise to check out any unneeded work done at the dishonest shop, rebate the full cost of the work, and redo it without charge if it was not done properly, and to provide the free wheel balancing and alignment the customer had been getting at the dishonest service department. We are not doing all this simply as a public service. We hope to put an end to competition by the dishonest shop by driving it out of business, and we plan to do all we can to dramatize the case. I expect to turn to the prosecutor and to friends in the local media for help on that.

I realize my approach to the problem is hardly loving, but what else am I to do? After all, business is business.

Analysis:

This question calls for the derivation of a moral norm. One may never choose to destroy an instance of a basic human good, and a business is an instance of the basic good of community. So, one may not try to drive competitors out of business. Therefore, the questioner’s proposal is morally unacceptable. However, the questioner and his or her friend have a morally acceptable alternative: to work with the prosecutor to achieve the good end of proving the competitors’ fraud and putting a stop to it. In doing this, they may seek the ulterior end of benefit to their own businesses, and they can rightly accept as side effects both the failure of their competitors’ business and its bad consequences for innocent third parties.

The reply could be along the following lines:

Insofar as a business is a specific kind of human association, it is not just an instrument for attaining other goods, but itself instantiates the basic human good of community. So, to try precisely to drive someone out of business is to choose to destroy an instance of a basic human good. Such a choice always is wrong, and no ulterior end, however good, can justify it (see CMP, 141–71, 215–22).

Of course, something called “a business” may be nothing more than a group of individuals, such as a band of thieves, sharing no common commitment to any basic human good, not even the commitment to treat one another fairly. They may arrange to coordinate their behavior so that it better serves their various goals, but their interrelationships do not constitute a community. Choosing to drive such a group out of business would not be contrary to a human good and might well be justifiable.

Then too, someone who is not choosing precisely to destroy an enterprise as a human community might be said to be trying to drive it out of business. The prosecutor you have talked with might intend solely to stop fraud, yet could say he is trying to put the franchise out of business, assuming that it would no longer be viable if all its fraudulent practices were ended, and accepting its failure as a side effect of stopping the fraud. However, you and your friend, the Ford dealer, apparently are motivated by resentment and also want to drive the franchise out of business as a means to eliminating its competition.

Acting vindictively always is wrong. Nor may one ever seek others’ injury as a means to an ulterior end. You also should foresee that if you succeed in driving your competitors out of business, their suppliers, employees, and customers are likely to suffer losses: the suppliers may lose business, the employees might not easily find other jobs, and most customers probably will lose the service still due them under their contracts for wheel alignment and balancing. Since you and your friend will be at fault, you cannot rightly accept any of this harm to third parties, and so will be guilty of the injustice of bringing about all of it.

You might argue that the dishonest shop’s employees, being involved in its wrongdoing, deserve to lose their jobs, while its customers’ loss of the service due them will be compensated by their no longer being defrauded. But are you sure every one of the employees shares moral responsibility for the shop’s fraud? Even if you are, you cannot be sure every one of the customers who stand to lose out on the service due them would have been vulnerable to the fraud.

You and your friend have a morally acceptable alternative, however, which you should choose.

Considered in itself, your plan to obtain evidence of the franchise shop’s fraud and provide the evidence to the public prosecutor is morally acceptable. However, your purposes should be to help the law do justice and to compel your competitors to do business honestly. If you and your friend act for these legitimate purposes, you probably will behave somewhat differently. For example, you might tell the owners of the franchise shop that you know about its wrongdoing and try to encourage them to repent and make fair restitution to those they have defrauded, making it clear you will not let the matter rest unless the fraudulent practices are eliminated completely and permanently. Then, if you must go through with the plan you describe, you will not try to injure your competitors by getting the prosecutor and your media friends to dramatize the case.

If the dishonest shop ends its wrongdoing, makes restitution, and survives, you and your friend presumably will benefit by not having to contend with the advantage your competitors enjoyed as a result of dishonest practices, and you may rightly seek that benefit as the ulterior end of your public service. Perhaps your competitors will not survive exposure, but if your purposes are limited to bringing them to justice and compelling them to do business honestly, you can rightly accept that outcome and its harmful effects on third parties as a consequence of doing something good.