Shimon owns a bakery which has been supplying his small town for many years. Levi decides to open a new bakery and has substantial financial backing from his rich father-in-law. Levi knows that the town can only support one bakery and that he will be able to outlast Shimon because of his father-in-law’s ‘deep pockets.’ After a six month struggle to compete, Shimon is forced to declare bankruptcy.

Figuratively speaking, Levi encroached on Shimon’s ‘territory’ (see Sh”ut Maharshal siman 89). There is a halachic debate whether the Torah intended to directly prohibit (mid’oraisa) the opening of a competing business in someone else’s market or to merely allude to the impropriety of doing so (asmachta).

At this point, you may be wondering, “I see so many Torah-observant people starting businesses which compete in an already established market. Could they all be ignoring the prohibition of hasagas g’vul?

In Shulchan Aruch, Choshen Mishpat 156:5, we find the following halacha stated by the Mechaber:

…if there was a craftsman who lived in a certain alley… or there was a bathhouse or store or mill, and a fellow citizen [even someone who lived in a different alley] came into that alley and made a competing bathhouse or mill, he [the first one] cannot prevent him [the second one] from opening by claiming that he his stopping his livelihood…

Clearly, this halacha indicates that, as a general rule, it is permitted for a resident of a town to open or expand his business and actively compete against an already established business. The reason for this is that the Torah views a town to be the ‘territory’ of all its residents. As such, each person is considered to be doing business within his own portion of the communal marketplace (see Pischei Choshen 4:9:2, d”h adayin). Thus, we may safely say that most new businesses are not transgressing the law of hasagas g’vul. Of course, general rules commonly have exceptions. Furthermore, this rule only applies to businesses that are opened by residents of the city. The halacha is considerably more complex with regard to a non-resident’s right to compete against the residents of the city. Therefore, before deciding to compete in an established market, a competent halachic authority should be consulted.

In light of the previous discussion, we are left with the following obvious question. In our opening scenario, what did Levi do to earn for himself the awful curse of someone who has moved the boundary of his fellow man? The Pischei Teshuva (156, s.k. 3) explains that the Torah’s rationale that allows free entrance into the communal marketplace is really a double-edged sword. Just as it allows a newcomer to claim his portion of the marketplace, it forbids the forcing out of an established business since that would be encroaching on his portion of the communal territory. In summary, Levi does have the right to open a new bakery in town, but only if that will not directly cause the failure of Shimon’s. It should be noted that although this is the view of the majority of authorities, a dissenting opinion is presented in the Pischei Teshuva. Furthermore, it cannot be stressed enough that the purpose of this article is only to present the basic guidelines of hasagas g’vul and that any actual case must be judged on an individual basis.

There is a well-known story regarding the saintly Chofetz Chaim. Of course, the story will not offer us any insight into the practical halachic requirements of hasagas g’vul since the Chofetz Chaim lived on a different plane way beyond the letter of the law. However, it can provide us with inspiration in our own efforts to be cognizant of our responsibilities with regard to these laws.

Once, the Chofetz Chaim opened a grocery store in his town of Radin in Poland. His ‘business strategy’ was quite simple – fair prices, accurate weights, and impeccable honesty. He also instructed his wife, who managed the store, that she should close the store every day after earning enough for that day’s needs. Not surprisingly, customers flocked to the store knowing that they were getting the best deal in town. Furthermore, they all came early in the morning since they didn’t know when the rebbetzin (rabbi’s wife) would close for the day. The Chofetz Chaim was quite disturbed by this since it meant that the other grocers in Radin were losing too much of their business. He instructed his wife to open the store for only one hour in the afternoon, hoping that he had solved the problem. To his chagrin, the customers were happy to wait until the store was opened in the afternoon and descended on the store all at once. The Chofetz Chaim gave up and closed the store entirely. Such behavior truly deserves the Torah’s blessing (see Rashi, Devarim 27:12), “Blessed is one who does not move the boundary of his fellow man.”