Refusal to deal

Competition law

Basic concepts
History of competition law Monopoly and oligopoly Coercive monopoly Natural monopoly Barriers to entry Herfindahl–Hirschman index Market concentration Market power SSNIP test Relevant market Merger control
Anti-competitive practices
Monopolization Collusion Formation of cartels Price fixing (cases) Bid rigging Tacit collusion Product bundling and tying Refusal to deal Group boycott Essential facilities Exclusive dealing Dividing territories Predatory pricing Misuse of patents and copyrights
Enforcement authorities and organizations
International Competition Network List of competition regulators
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Though in general, each business may decide with whom they wish to transact, there are some situations when a refusal to deal may be considered an unlawful anti-competitive practice, if it prevents or reduces competition in a market. The unlawful behaviour may involve two or more companies refusing to use, buy from or otherwise deal with a person or business, such as a competitor, for the purpose of inflicting some economic loss on the target or otherwise force them out of the market. A refusal to deal (also known as a group boycott) is forbidden in some countries which have restricted market economies, though the actual acts or situations which may constitute such unacceptable behaviour may vary significantly between jurisdictions.

Definitions

Australian Competition & Consumer Commission defines the refusal to deal as:

Agreements involving competitors that involve restricting the supply of goods are prohibited if they have the purpose or effect of substantially lessening competition in a market in which the businesses operate.
— Australian Competition & Consumer Commission, Refusal to deal ^[1]

The Indian Competition Act 2002 defines the refusal to deal as:

"Refusal to deal" includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought
— The Competition Act, 2002 (India) S4-d

In Canada, refusal to deal is considered a restrictive trade practice and is defined in Section 75 of the Competition Act (R.S.C., 1985, c. C-34).