Hi guys,
I live in a population 500/600 hundred village. I do a nice chunk of business 30 minutes away in the city, but you can imagine that it's nice to be the sole "cake lady" in my small town.
I was the only cake decorator, but today on facebook I see a new girl (actually, its two friends doing it, as I understand) starting to do cakes. They're the ones seen commonly on cakewrecks, lol of course...(Not smooth, star tipped, character cake pans)
The kicker is she's getting very good reviews/compliments. I know they're cake muggles, but c'mon!
I also know I'm not a fabulous caker, but if I truly was an outsider seeing my cakes, verses theirs, I'm sure I'd choose me!
Now, I am hesitant to "like" their page...(forwarn, this is the devious side of me! 
) but I know if I DID, I would potentially get their 'clients' to see me on there as well. (I always have cakes I've done set as my profile photo)
Would you "like" them?
No, I would not. I know a lot of people network like this, but I choose to allow my market to discover other cakers for themselves, and not through my Facebook page. At the most, I would privately message them and inform them about possible copyright violations that could get them in hot water. The comments are probably all of her friends being nice.
There is a lady in my area who sells very poorly done character pan cakes for super cheap ($1 per serving). I don't sell cakes and I almost want to like her on Facebook just to see what she comes out with next (she posts her new cakes very proudly).
That said, I wouldn't consider liking her if I was selling cakes. I wouldn't want to accidently bring her more business. We share a mutual friend and I know that she keeps really busy (not surprised with her prices).
Do they have many fans already? It's not like they get an email that says you follow them, they would have to physically look at their fans in order to see you. You also don't need to be a fan to see a business page, it's public, so if you are really worried about it, just bookmark it and check it out from time to time.
I follow all my competition's facebook and tweets, and I also follow tweets for cake and cupcake businesses all around the US. It's no big deal, I like to see what everyone's doing so I don't copy them (or if they are friends of mine, and I do have several competitors that are actual friends, we do give kudos back and forth, or critique each other's work). If someone comes to my facebook and sees that I'm a fan of XYZ cakes, I am really NOT concerned that my potential customers will click off my page to them and I'll loose business. Statistically that doesn't happen.
Being a fan on facebook means very little, most people will "like" a page, then hide the status feed from their wall. The only benefit from a business getting fans is: Google ranks your business higher in internet searches. The more fans you have, the "better" your business must be, therefore higher you'll rank in search results.
Jen
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