(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.
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.