I. Introduction 1. Exclusive dealing is one of a wide range of restrictions which suppliers may either provide for explicitly in their agreements with their customers, or may impose to a greater or lesser extent as a matter of practice. Being a non-price “vertical” restriction (that is, occurring between parties who are, at least for the purposes of the exclusive dealing, active at different levels in the supply chain) exclusive dealing can in many situations be expected to be entirely innocuous, or even beneficial, from a competition law point of view. Nevertheless, there are situations in which it raises competition law concerns, the chief of which is foreclosure from the market of equally efficient competitors. 2. The question therefore arises for competition law policymakers and
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PRACTICES: EXCLUSIVE DEALING - FORECLOSURE - EQUALLY EFFICIENT COMPETITORS - PRESUMPTIONS
Exclusive dealing: Presumptions and bright lines
The principal competition issue raised by exclusive dealing is the possible foreclosure of equally efficient competitors from the market. Exclusive dealing may constitute an infringement either of the rules that govern unilateral anti-competitive conduct, such as abuse of dominance, or of the rules against anti-competitive agreements. In either case, it is desirable that those applying and subject to the rules can make use of certain presumptions when carrying out their analysis. Possible factors which might be used as a basis for such presumptions include parties’ market shares, or the share of the market foreclosed by exclusive dealing arrangements, market share gain by competitors, or duration of the exclusivity term. In practice parties’ market share is the main basis for the presumptions that exist, and even these do not necessarily guide enforcement activity.
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