Large companies often feel like they are untouchable. However, often just the opposite is true. The larger a business becomes, the more risks they must manage – and the more scrutiny they might face.

These increased risks are clear in the lawsuit recently filed against Amazon and its partnership with the home security company, Ring.

RING AND AMAZON FACE AN ONSLAUGHT OF CHARGES

Home security systems, like the ones sold by Ring and Amazon, have swept the nation. However, hackers have been able to get into these systems, leading many consumers to turn their anger on the companies.

According to Business Insider, customers brought a federal lawsuit against the companies with a long list of charges, including:

  • Negligence and breach of an implied contract;
  • Invasion of privacy;
  • Breach of the implied warranty; and
  • Unfair competition law violations.

These are all serious charges, and Amazon and Ring could face considerable damages and penalties if federal courts find them liable for these claims.

LARGER COMPANIES CAN SUFFER LARGER DAMAGES IN CASES LIKE THIS

In cases involving the violation of unfair competition laws, businesses generally have to reimburse the other parties for damages they suffered, plus potentially punitive damages and attorney’s fees. To calculate these damages, courts will consider:

  • The damage caused by the misconduct;
  • How many violations of the law occurred;
  • How long these violations continued; and
  • The net worth of the accused party, which in Amazon’s case, is significant.

This could add up to huge financial losses, not to mention the damage to their reputation and public image.

Small companies as well could suffer irreparable harm if found liable for unfair competition violations. That is why it is critical for businesses to seek experienced counsel if they are charged with violating the law, so they can protect their reputation and future business ventures.