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Publication Date

2011

Abstract

Exclusive dealing agreements are a form of vertical
restraint. They are often procompetitive and treated as
presumptively legal. Although claims against
anticompetitive agreements may be pursued under
numerous antitrust laws, claims have been brought more
recently under section 2 of the Sherman Act. Antitrust
laws generally focus on the percentage of foreclosure.
Section 2 of the Sherman Act, though, requires a smaller
percentage of foreclosure of distribution channels than
other antitrust laws. Analysis under section 2 of the
Sherman Act also focuses on the actual effects of the
agreement in the relevant market. Determining the
agreement's actual effects on the relevant market requires
weighing the procompetitive benefits of the agreement
against any possible anticompetitive effects.
This Note examines the historical and current treatment
of exclusive dealing agreements and the importance of
economic theory underlying exclusive dealing. This Note
argues that anticompetitive effects are easier to allege and
demonstrate through hard data than potential procompetitive benefits, which often require defendants to
rest their arguments on economic theory. Given that
courts today have indicated a desire to rest their decisions
on market realities rather than economic theory,
defendants are at a disadvantage under section 2 of the
Sherman Act. This Note proposes that the adoption of a
safe harbor for defendants who foreclose less than 30% of
the relevant market would remove the disadvantage
placed upon defendants.

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