As part of the pre-Pesach preparations, many organize special sales of Pesach-related goods. These include regular goods such as meat and groceries, as well as special Pesach products such as matzos and Pesach-related tableware. Some even open up a special Pesach store to provide customers with all their Pesach needs.
This brings us to discuss the halachos of hasagas gevul, which is the expression used to define forbidden competition that deprives a person of his income.
While it seems that opening a Pesach store is an innocent activity, could it involve a prohibition of unlawful competition?
Torah or Rabbinic Prohibition
The prohibition of yored le’umanus chavero, literally “descending to another’s profession” or, more simply, illegal competition, is derived from two distinct verses. The Gemara in Makkos (24a) derives the prohibition from the Pasuk, “he did not perform evil with his neighbor” (Tehillim 15:3), whereas the Gemara in Sanhedrin (81a) learns the same idea from the Pasuk, “he defiled his neighbor’s wife” (Yechezkel 18:11).
The derivations, which are not based on a Torah Pasuk (but rather verses in the Prophets and the Writings) nor even on the simple interpretation of the Pesukim, indicate that the prohibition is rabbinic rather than Torah law. This is implied by the Beis Yosef (Choshen Mishpat 156): it is a tikkun olam, an enactment for the benefit of society, rather than Torah law.
The Chasam Sofer (Choshen Mishpat 79), however, writes that the prohibition is a full Torah injunction, basing this on several earlier sources. He explains that after the Sages enacted the prohibition, it is included in the category of theft (gezel), and therefore involves a full Torah transgression.
Certainly, the prohibition is a very grave sin, to the degree that Rabbeinu Tam (Sefer Ha-Yashar 741) even compares it with murder! As we will see, Poskim treat the prohibition with appropriate stringency.
Same Neighborhood and City
The Gemara (Bava Basra 21b) relates to a situation whereby a person operates a mill in a mavuy (alley), and another person wishes to open a similar establishment in the same mavuy. In modern terms, an Israeli rabbinical court (Piskei Din Rabbani’in 6:3) ruled that today’s neighborhood is equivalent to the Talmudic mavuy. Does the first person have the right to prevent someone else from opening a new mill?
In response to this question the Gemara cites a dispute among amora’im. Rav Huna asserts that the owner of the first mill can prevent the newcomer from setting up shop, since the newcomer will be interfering with the first person’s livelihood. Rav Huna son of Rav Yehoshua however, argues that the first miller cannot prevent the newcomer from opening shop. The competitor, as Rashi explains, can claim that “whoever will come to me will come to me, and whoever will come to you will come to you.” It is thus a matter of fair competition, which is not prohibited.
Virtually all early authorities rule in favor of the latter opinion. This is likewise the ruling issued by the Shulchan Aruch (Choshen Mishpat 156:5) and by later commentaries (see Aruch Hashulchan, Choshen Mishpat 156:6-7). The Rema (156:5) adds that other residents can prevent the second store from opening (see Shach 156:4 who takes issue with the ruling)—but this is not because of a competition issue, but over concerns for overcrowding. The competition itself is permitted.
Yet, the permission to open a new establishment is limited to a competitor who comes from the same mavuy (today, from the same neighborhood), for he is just as entitled as the first storeowner to earn a livelihood in that area. However, one who comes from a different city, and wishes to open a competing establishment in somebody’s mavuy, can be prevented from doing so. This is considered an unfair encroachment on another’s business.
The Gemara inquires as to whether somebody from a different mavuy, but the same town, has the right to compete, and the question is left without a decision. Rishonim rule that there is therefore insufficient basis for preventing a resident of another mavuy in the same city from opening a competing business, and this is accordingly ruled by the Shulchan Aruch (Choshen Mishpat 156:5).
Taxpayers as Residents
The Gemara adds that even an outsider is permitted to compete if he pays taxes to the local authority. The Tur (ibid.) rules that an outsider who pays taxes is permitted to compete “like the residents of the city,” and this ruling is echoed by the Shulchan Aruch (ibid.). The reason is that the entire reason for differentiating between local and non-local residents is because non-local residents didn’t pay local taxes. Therefore, if they do there is no difference between locals and non-locals.
Moreover, even when non-locals didn’t pay local taxes the Shulchan Aruch (156:7) rules that the restriction on outside competition does not apply to a market day, when people from outside the town also come to shop. This ruling will apparently apply in a general sense to malls and large shopping centers, which attract shoppers from out of town.
Degrees of Loss
However, beyond these basic principles which permit competition, the Aviasaf (cited by the Mordechai, Bava Basra 516) rules that it is forbidden for somebody—even for somebody who lives locally—to open a store at the entrance to a mavuy satum (a dead-end alley), if a similar establishment is already located further inside the mavuy. The reason is that opening such a store will bring the original storekeeper’s business to ruin. Potential customers will see the new store upon entering the alley, and the original establishment will remain unnoticed.
The Beis Yosef (Choshen Mishpat 156) understands that the ruling of Aviasaf follows the opinion of Rav Huna, whereby even a local resident may not compete with an already established business. As mentioned above, most Rishonim rule against Rav Huna, and in keeping with this majority opinion, the Shulchan Aruch makes no mention of the Aviasaf.
The Rema (Darchei Moshe 156:4), however, explains that according to the Aviasaf, all opinions agree that it is prohibited to open a new business if this will cause the original business (such as the one inside the mavuy) to collapse. In the words of the Aviasaf, cases of “definite damage” do not fall into the principles above, and it is forbidden for one business to cause “definite damage” to another.
In a renowned responsum (10), the Rema thus rules that it is forbidden for a second publisher to publish an already published work (the case discussed the Rambam’s Mishnah Torah), if this will bring the first publisher to ruin: “[A]ccording to our law, the second publisher may not publish it at all…for in a case where the damage is definite… all agree that the law is in accordance with Rav Huna.”
This principle of the Aviasaf appears in many responsa throughout subsequent generations (see She’eris Yosef 17; Masas Binyamin 27; Panim Me’iros 1:78; Shoel Umeishiv, Kama 1:21; Mahariaz Enzil 69; Maharsham 2:24; Avnei Nezer, Choshen Mishpat 24; and others). A particularly well-known use of the principle appears in the Chasam Sofer (Choshen Mishpat 41, 79, 118), who cites the concept to establish an author’s rights (In this case the publisher of the famous Roedelheim machzor wished to prevent others from publishing his machzor and the Chassam Sofer ruled in his favor.) against unfair copying.
In one teshuvah, the Chasam Sofer (61) explains that “in a case… where through his entering the profession he pushes aside the competition completely, so that it is impossible for both of them to gather enough customers, and it turns out that he is pushing aside the competition completely, this is descending into another’s profession completely.”
The principle is widely used in a broad range of business circumstances, including local neighborhood stores (where there are insufficient residents for more stores of the same kind), copyright law, and so on.
Shut Iggros Moshe (Choshen Mishpat 1:38) provides a fascinating and important application of the above ruling of the Aviasaf.
Rav Moshe discusses a case in which a number of congregants of a particular shul formed a breakaway shul, whose popularity exceeded that of the original shul. Most of the members of the original shul joined the new shul, denying the Rabbi of the original shul the income he had from membership fees. The Rabbi in question had bought the shul property some three years prior (opening a shteibel as a source of income), and the breakaway shul caused him serious financial harm.
In spite of the congregants’ claim that the liturgy (nusach sefard) of the original shul confused them (They davened Ashkenaz.), and that it was hard for them to cope with the Rabbi’s angry outbursts, Rav Moshe rules that the congregants were not allowed to break away from the shul. Citing the Chasam Sofer and the Aviasaf, he explains that the severity of the prohibition of cutting off somebody’s income cannot be offset by the congregants’ claims.
It is important to note that several congregants did remain in the original shul, and therefore the income of the Rabbi was not entirely ruined. Nonetheless, Rav Moshe writes that “because the congregation has become so small, so that the income is insufficient for his needs… this is certainly a prohibited case of ruining another’s income.”
What degree of damage is considered “ruining one’s income”? Rav Moshe writes that “it is simple that a person’s livelihood means the average level of expenses that a person of his stature generally requires… even if he will have enough income for limited expenses.”
Furthermore, Rav Moshe argues that in this case the second shul was not a business venture of any sort whereas for the Rabbi it was. The establishment of the shul thus destroyed the Rabbi’s parnassah without creating a parnassah of its own, and it is therefore all the more prohibited. This added stringency is pertinent to private sales organized within certain communities, where products (such as meat, clothing, and so on) are sold at cost price. If these sales are liable to bring ruin to local stores, they are forbidden. One must, therefore, carefully evaluate each situation.
Selling for Cheap
The principles above indicate the care that Chazal and later authorities had for existing establishments. However, Chazal and authorities also are concerned for the good of consumers, and the Chachamim (Mishnah, Bava Metzia 4:12) praise those who lower prices.
Based on this principle, the Rosh (Bava Basra 2:12, citing the Ri Migash) rules that “if somebody sells for a cheaper price, he is not prevented from opening his business, because it is for the benefit of the residents.” The Beis Yosef (156) writes that the Ramban disputes this ruling, and maintains that even when prices will be lowered, existing businesses have the right to prevent outsiders from opening a new business.
The Shulchan Aruch does not mention this issue, but the Rema (156:7, citing yesh omrim) rules that where prices will be lowered, an existing business cannot object to an outsider’s opening a new business. Yet, based on the ruling of the Aviasaf, this principle will not apply where prices will be far lower than current prices, so that the existing business will be unable to compete.
Rabbi Moshe Sternbuch (Teshuvos Ve-Hanhagos 1:800) rules that it is permitted for somebody to open a rival restaurant next to an already existing restaurant (even at lower prices). However, if prices are much lower than those of the rival restaurant, so that the existing restaurant will be unable to compete, it is forbidden to lower prices and drive the existing restaurant out of business. The prohibition will not apply when only several items are sold at the lower price, so that the rival restaurant will also be able to maintain his business. However, it applies when one opens a chain store near a local store and offers prices which the local store cannot meet.
Concerning special local sales of meat and other festival goods, it therefore is usually permitted. Even if the person organizing the sale is not local, the prices are lower than those of stores, while the sales do not pose a long-term threat of putting established stores out of business.
- If a store or business is opened in contravention of halachic principles, there is no obligation to pay damages to the existing stores. However, the local storeowners will have the right to demand the store’s closure (Kenesses Hagedolah 156:9; Beis Efraim 26; Masas Binyamin 27).
- It is permitted to place a tzedakah box in a location where a tzedakah box is already present. Donors have the choice of which box to donate to, and there is therefore no case of hasagas gevul (Shut Maharsham 5:105).
- In Internet sales the issue of hasagas gevul does not apply; the nature of Internet sales is that if you don’t open a competing business someone else will, and the Rabbonim have no control over the I Therefore, nothing positive will be accomplished in preventing someone from establishing a competitive site.
In general, it should be noted that Chazal do not see competition in a negative light, and it is permitted for one store to compete with another by means of advertising, sales gimmicks, and so on—provided that other stores are able to compete, and will not be driven out of business (as noted above).
Yet, as we have seen, a person who wishes to open a new store must take the damage he is liable to cause into consideration. Even where it is formally permitted to open a store or establishment, the Shulchan Aruch Harav (end of Hefker Vehasagas Gevul) and others previously cited write that one should nonetheless avoid causing others a loss. One who wishes to open a store or establishment, or to engage is business in general, must therefore be aware of the principles. Of course, in practical cases of doubt, a competent halachic authority should be consulted.