Extortion is still extortion.
Even if the thing you are threatening to do is perfectly legal sans the threat.
Being an asshole is still being an asshole.
Even all was legally sound and the other guy could/should have seen your capability to screw him in the terms, securing and exercising that capability is a choice, and that choice can make you an asshole. It is perfectly legal to choose to be an asshole, but don't come whining to me or anyone else when you get called out. Those are the stakes.
If you actively piss off your customers or prospective customers enough to hurt your reputation, that is on you. It's your problem, and it's your fault.