How to avoid fines for “exclusive dealing”

21-November-2012 Commercial Disputes By admin

If your company trades with another company and imposes a restriction on what, who and where they conduct their business, you may be involved in “exclusive dealing” and “third line forcing” – which contravenes Australian Consumer Law.

Streeterlaw solicitor Evatt Styles said non-compliance with the Competition and Consumer Act (2010) can attract significant penalties, so it’s important businesses know whether or not they are conducting “exclusive dealing” or “third line forcing”.

“Discovering if a business is involved in exclusive dealing or third line forcing isn’t always straight forward,” Mr Styles said. “It depends on whether the conduct of the company satisfies the test of whether it has substantially lessened competition in a market. It also depends on whether geographical restrictions have been imposed as a condition of supply and also on the size, product and extent of the exclusive dealing.

“As a rule of thumb, the more exclusive the product is, the more powerful the supplier, and therefore the more likely it is that the ACCC will believe that the competition is affected.”  

Mr Styles said when territorial restrictions have been imposed as a condition of supply, consumers must be severely restricted in their ability to buy a product or its substitutes within the territory for it to be considered “exclusive dealing”.  

Streeterlaw conducts Case Appraisal Conferences to discuss and advise companies on their compliance with the ACL and what their rights, duties and obligations are.

“We can also advise clients on how to provide Notice to the ACCC (which will provide immunity to the entity providing Notice), and instruct clients on how they should respond to a Notice received from the ACCC,” Mr Styles said.

Contact Streeterlaw solicitor Evatt Styles for further information on (02) 81970105 or by email at Evatt.Styles@streeterlaw.com.au

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