Kohn, Swift & Graf’s antitrust lawyers represent businesses and consumers harmed by exclusive dealing contracts. An exclusive dealing agreement is an arrangement between a buyer and seller to satisfy most or all of one or the other’s requirements. The contract has the effect of:
• forcing a buyer to purchase all or most of a certain product or service from a particular seller for a specified time, or
• forcing a seller to sell all or most of its products to a particular buyer
This can be accomplished either directly or indirectly by:
• specifically requiring a buyer or seller to deal only with the party with whom the agreement is formed, or
• prohibiting the buyer or seller from dealing with anyone else
Exclusive dealing contracts can substantially reduce competitors’ market shares and profits or altogether remove them from a market. They can also harm consumers by raising the prices of goods or services to which the restricted dealing relates. Businesses and consumers who sustain injury from illegal exclusivity contracts may bring private actions under federal or many state antitrust laws.
Exclusive Dealing Lawsuits
While most exclusive dealing agreements are lawful, those with primarily anti-competitive effects may lead to liability under federal antitrust laws. These laws prohibit arrangements that:
• result in unfair competition
• substantially hinder competition
• form, attempt to form, or tend to form a monopoly, or
• otherwise unreasonably restrain trade
Because exclusive dealing contracts can have both pro-competitive and anti-competitive effects, courts employ a “rule of reason” analysis to determine if particular arrangements violate antitrust laws. In making its determination, a court may consider many factors, including the:
• extent to which the agreement forces competitors from the market or prevents others from entering the market
• market share / power of the parties engaged in the agreement in relation to that of the competitors
• reasonable justifications for the agreement
• length of the agreement
• ability of the agreement to increase costs to competitors
As in other private federal antitrust actions, plaintiffs are entitled to recover three times their actual damages as well as attorneys’ fees incurred in litigating the action. In some cases, plaintiffs may obtain court orders enjoining defendants from further activity pursuant to an illegal exclusive dealing contract.
Most states’ antitrust laws also grant a private right of action to redress exclusive dealing and other antitrust injuries.
Contact an Antitrust Lawyer
Anti-competitive exclusive dealing arrangements can cause substantial harm to both businesses and consumers. If you believe you are the victim of an unlawful exclusive dealing agreement, contact us today. We will evaluate your case without charge.