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The phrase "sinister competition" is correct and usable in written English.
It can be used to describe a rivalry or contest that has malicious or harmful intentions behind it. Example: "The two companies engaged in a sinister competition, resorting to unethical tactics to undermine each other."
Exact(1)
He plays the arrogant, insouciant Williams, who competes alongside Lee in a sinister competition organised by the mysterious Mr Han on a James Bond-style island.
Similar(58)
The motives of the sovereign moneymen could be sinister: stifling competition; protecting national champions; engaging, even, in geopolitical troublemaking.
If Smith's plan sounds to you like an almost sinister level of retail competition genius, you're right, and major retailers and their customers agree with you.
That may be enough to raise the profile of Sudan, but Khamis knows that no matter how well he performs in international competitions, Sudan will remain in the news for more sinister reasons.
Sinister menace?
But sinister?
"Sinister," he said.
Woo... sinister.
Sounds sinister.
The town is sinister".
Something more sinister?
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com