Our competition is going above and beyond what we consider normal rivalry, advice?

My boyfriend and I live in a relatively small community in Europe, and started up a new business about a year or so ago. We have been really successful because our business model allows us to have very little base cost, which makes us very competitive price wise. We've clearly made a huge dent in the market in our area, because some of our competition (local businesses, not big monopolies) seems to have gotten very hostile about it. In the last year, they've reported us to the tax authorities, and social security, so we had an audit that came up clean (we are not doing anything illegal, they basically walked out annoyed they wasted their time). They have created an organization for "quality control", which only includes the vocal competitors against us and focuses all of their efforts on proving we are not legal. They regularly stalk our business facebook and make comments to put in doubt the legitimacy of our services. (This would be fine if blocking them made this stop, but they are actually making fake accounts to continue harrassing us on our social media. It has gotten to the point where about 80% of all our comments are clearly our competitors expressing concerns about our 'professionalism'.) We have even seen the owners of the other businesses outside our home and received threatening calls about sending the police to deport me or sending an inspection… (I am a legal resident)

We do live in a small, traditional, type of town, where they believe there is only one way to do things, but our customer base and the law seems to have no problem with our innovative approach. This apparently has blown their minds, because they have gone as far as to contact our lawyer and tell him he doesn't understand business law. We pay our taxes and social security just like everyone else.

I am sure plenty of businesses have gone through this exact same thing, and I am looking for some advice. Up to now, we haven't really seen any negative impact on our bottom line, but we are worried that if this continues and there is a pattern of people claiming we are not legitimate, this could affect the future of our business. Plus, it is draining to spend half of our time responding to questions about our legality from people that clearly have no interest in our services. How have you handled this in your business? How would you go about stopping the harassment, via legal means? We want to stay above this, but some days we are at a loss for what to do.

TL;DR We are a new small business who is getting harassed by a few other local businesses to the point where they are outside our home and flooding our social media.

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