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Chewy.com Lawsuit Brings Up Unfair Competition Issues


In yet another example of how not to do business fairly and competitively, it seems that two online animal prescription companies are facing off in court over allegations of unfair competition. Once again, the lawsuit is a good example of the fine line between what can be fair and unfair competition.

Two Veterinary Prescription Companies Square Off

Two companies, Chewy.com, and Vetcove, both have online or mail away prescription pharmacies for animal medications. Both companies’ medicines must have a vet prescribing them before they can be distributed.

The problem is that Vetcove, according to Chewy, has a leg up because in addition to being an online pharmacy the way Chewy is, Vetcove also is a software practice management company. In other words, many veterinary offices use Vetcove software to manage their daily practice.

The Allegations of Unfair Competition

According to Chewy, Vetcove is using this to their advantage. Chewy says that Vetcove will, when it gets an order from Chewy, send out emails to customers telling them that the order cannot be filled. It then will offer for the prescription to be filled by Vetcove.

In other words, according to the suit, Vetcove is using the fact that it is a practice management software, and already integrated into veterinary practices, to unfairly compete with Chewy, or worse, that it is actively deceiving customers, and rejecting Chewy orders.

Sometimes, according to the suit, Chewy will request a prescription or permission from the vet, before disbursing the prescription, as it must do. However, when the permission or prescription is provided, the software doesn’t send the paperwork to Chewy—it uses the paperwork itself, dispensing the medication from Vetcove’s dispensary. The system will then send an email to the customer, with some reason why Vetcove, and not Chewy, is filling the order.

Vetcove Defends Practices

Vetcove counters by saying that when customers are solicited by Chewy, customers will routinely ask their vets about Chewy. When customers ask the vets they are often told that the prescription can be had cheaper, through other avenues. That, Vetcove says, is entirely legal, and is all that is happening. They also say that Chewy is trying to do an “end run” around vets, taking them out of the pharmacy business.

Many consumer advocates say that this alleged relationship between vets and Vetcove, cutting out independent online retailers like Chewy, is ultimately bad for consumers. In some states, vets will actively refuse to send prescriptions to Chewy, instead favoring their own sources.

Regardless of who ends up right (or if the case settles), the fact remains that businesses should be wary of using influence, or unfair advantages, when trying to gain market share in any industry. This is especially true when a business is very prominent or dominant in one field, subsection, or area, and then uses that advantage to benefit itself in a separate area or field.

Do you know what kind of practice is fair and unfair? We can help. Call the West Palm Beach business litigation attorneys at Pike & Lustig today.




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