When does Antitrust and Competition Law Sanction a Refusal to Deal with a Competitor?
In some circumstances, refusing to do business with a competitor violates the United States Antitrust Laws (Section 2 of the Sherman Act). This may seem surprising. Indeed, the general rule is, in fact, that antitrust law does NOT prohibit a business from refusing to deal with its competitor. But sometimes you do have to work with a competitor.
In my most recent blog post, which you can read by following the link below, I explain that companies may find themselves subject to antitrust liability if the following three factors are met:
- If the company has monopoly power or, using the terminology of non-US jurisdictions, the company is dominant.
- If the dominant company had previously done business with a competitor, but then ceased doing business; and
- If terminating business with the competitor eliminated a profitable course-of-dealing (i.e. short-term profits) only for the long-term benefit of knocking the competitor out of business.
As I explain, the refusal-to-deal doctrine in the United States is alive, but is certainly not favored.
You can read more at the link below.
Jarod Bona is an antitrust, appellate and, business litigation attorney for Bona Law PC in San Diego, California. He is also admitted to practice law in Minnesota and Virginia. He is the author of The Antitrust Attorney Blog.