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In competition law, exclusive dealing refers to an arrangement whereby a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area. When the sales outlets are owned by the supplier, exclusive dealing is because of vertical integration, where the outlets are independent exclusive dealing is illegal (in the US) due to the Restrictive Trade Practices Act, however, if it is registered and approved it is allowed.
Exclusive dealing can be a barrier to entry.
In Australia, one form of exclusive dealing – known as third line forcing – is prohibited per se, meaning that it is prohibited no matter what its effect on competition.
Third line forcing involves the supply of goods or services on condition that the purchaser acquires goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
- Tied petrol stations that only deal with one petroleum supplier.
- Public houses tied to breweries.
- Franchisees forced to buy product from a host company instead of a local provider.
- seller agreeing to sell only to certain buyer
- market segmentation approach
In British politics
In British politics, 'exclusive dealing' was, before the introduction of the secret ballot by the Ballot Act 1872, a means by which those without the vote could exert pressure on shopkeepers etc. – a policy that any shopkeeper voting against the popular candidate would lose the custom of non-voters of an opposite persuasion. The practice was much the same as a modern boycott; it was effective for the Radicals in some borough constituencies, and they were therefore wary of any offer or attempt to introduce the secret ballot ahead of a substantial extension of the franchise.
Notes and references
- Australian Competition & Consumer Commission: Exclusive dealing
- see p17 of Bickerstaffe, Derek (1964). "Politic and party organisation in Oldham" (PDF). Durham E-Theses Online. Durham University. Retrieved 25 February 2016. and in particular the 1832 placard quoted
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