Unquestionably, boycott behavior represents ethically wrong behavior; thus, whenever boycott behavior is initiated, it is very likely that unfair competition and competition restraints follow, thereby violating the Fair Trade Act. This study notes that, in an analysis, when the concept of “nature of competition” in industrial economics is adopted, it is easier to identify any damage to “market competition” or “industry competition” caused by boycott behavior. As per law, boycott behavior can be classified into supply severance, purchase severance and boycotts of other transaction behavior. In addition, depending on the state of the market that the initiators, participants and victims of boycotts encounter, boycott behavior can be further categorized into eight types under horizontal and vertical boycotts. Using an economic model for analysis, it is found that boycott behavior contributes to a decline in consumer surplus no matter if it is in a competitive market structure or in a dominant firm market structure. Also, such behavior results in a leveling down of overall social welfare. Finally, this study full supports the position that the competition authority should adopt the “per se illegal” principle to handle boycott behavior.