Generally, businesses are free to determine the terms on which they deal with their wholesalers, suppliers and customers. However where parties supply or acquire goods on conditions that are anti-competitive, they may be breaking the law.
When working in business, it is important that you are aware how the exclusive dealing prohibition affects the way in which you can negotiate with your customers or suppliers. Significant penalties can be imposed on businesses that breach the prohibition.
What is exclusive dealing?
Exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what or where it does business. Exclusive dealing is unlawful under section 47 of the CCA where it has the purpose, effect or likely effect, of substantially lessening competition in a market.
Generally, the more exclusive the product and the more powerful the purchaser or supplier, the more likely it is that competition will be affected in a market.