The term exclusive dealing refers to arrangements whereby one party is only willing to do business with another party if they agree to deal with them exclusively, or they agree to purchase a large share of their total requirements from the first party. Exclusive dealing can be considered an anticompetitive practice if it restricts trade or decreases competition in a given market.
In a typical exclusive dealing arrangement, a seller would agree to sell all, or most, of its products or services to a single buyer. Conversely, a buyer might agree to purchase all, or most, of a particular product or service from only one seller.
Not all exclusive dealings are illegal. For example, a vertically integrated company could manufacture a product that is then sold at a retail outlet. To control quality, a franchisee might also be required to purchase supplies from only one seller or directly from the franchisor. Exclusive dealing can be illegal under the Sherman Antitrust Act of 1890 and the Clayton Act of 1914, if the arrangement is found by a court of law to affect a substantial share of competition.
In addition to exclusive dealing, anti-competitive practices may include dividing markets, boycotts, bid rigging, dumping, tying arrangements, price fixing, disparagement, as well as the unethical collection of business intelligence.
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