How to avoid fines for “exclusive dealing”

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.

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, 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.

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.

Contact Streeterlaw solicitor Streeterlaw for further information on 02 8197 0105 or contacting us by using the below webform. You can also reach us at advice@streeterlaw.com.au.

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!