Unlawful Exclusive Dealing or Tying under Section 3 of the Clayton Act
We have extensive experience litigating and advising clients about claims made under Section 3 of the Clayton Act, which is codified at 15 U.S.C. § 14, and which forbids certain kinds of exclusive-dealing and tying arrangements: namely, those that meet the following two criteria: (1) the arrangement is used in a contract or transaction for the sale or lease of a commodity in interstate commerce; and (2) the arrangement substantially lessens competition in a properly defined relevant market — typically by foreclosing such a high percentage of overall sales as to deprive competitors an opportunity to establish a foothold in the market and impose viable competitive pressure on the defendant.
Historically, Section 3 of the Clayton Act reaches only exclusive dealing or tying used in the interstate sale of commodities, while Section 1 of the Sherman Act reaches these same practices when used in the provision of services in interstate commerce. The distinction matters: at least arguably, Section 3 still permits a plaintiff to seek an antitrust injunction upon a showing of a substantial likelihood of a violation. Section 1 requires a plaintiff to prove its antitrust injury caused by harm to competition in a properly defined relevant market under the modern consumer-welfare standard.
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ANTITRUST EXEMPTIONS AND IMMUNITIES (By William Markham, © 2022)
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HOW THE CONSUMER-WELFARE STANDARD TRANSFORMED CLASSICAL ANTITRUST LAW (William Markham, © 2021)
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