exclusive dealing


Also found in: Wikipedia.

exclusive dealing

a business practice whereby a supplier contracts distributors/ retailers to sell his products on an exclusive basis (i.e. to refrain from handling the products of rival suppliers). Retailers are rewarded for sole representation in a variety of ways including preferential discounts, back-up services and loans. The practice of exclusive dealing may help the supplier boost his sales and protect market share because distributors have an undivided commitment to the product. However, if undertaken by a DOMINANT FIRM, the practice may serve to limit competition in a market by depriving rival suppliers of distribution outlets. See ANTICOMPETITIVE PRACTICE, COMPETITION ACT, 1980, OFFICE OF FAIR TRADING.

exclusive dealing

a type of ANTICOMPETITIVE PRACTICE/RESTRICTIVE TRADE PRACTICE whereby a supplier contracts distributors to deal only in his products to the exclusion of competitors’ products. Exclusive dealing may be beneficial in some cases by allowing distribution costs to be lowered but, if exclusive dealing is pursued by several large firms in a market, the access of smaller suppliers and potential entrants to established distributive outlets may be severely restricted. Under the COMPETITION ACT 1980, exclusive dealing can be investigated by the OFFICE OF FAIR TRADING and (if necessary) by the COMPETITION COMMISSION, and prohibited if found to unduly restrict competition.
References in periodicals archive ?
While Howard Marvel's free riding explanation of exclusive dealing retains its prominence, other related free riding explanations have recently been offered, along with other efficiency based explanations.
Chapters also cover customer and territorial restraints, trying arrangements, exclusive dealing and incentives to induce exclusive dealing, and price discrimination and the Robinson-Patman Act.
Supreme Court has left standing an appellate court's decision that under the antitrust laws, a sales representative can challenge the exclusive dealing requirements and territorial restrictions imposed by two furniture companies (Bassett Furniture Inc.
The Commission found that FEG "was operating a collective exclusive dealing arrangement involving the FEG, the association of importers of such products in the Netherlands (NAVEG) and a large number of individual suppliers of such products".
The European Commission has stung the Dutch association of electrotechnical equipment wholesalers, FEG (the Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied), as well as its biggest member, Technische Unie (TU), with fines for collective exclusive dealing and price-fixing.
Irrespective of whether there was exclusive dealing contract or an exclusive agency contract, the tenants could not unilaterally prevent the broker from performing its duties by dealing themselves directly with O&Y.
One popular way to frame the antitrust analysis of a vertical practice such as exclusive dealing is to assess the probability that it serves efficiency.