Exclusive dealing arrangements are contracts in which a seller agrees to sell all or a substantial portion of their products or services to a particular buyer, or when a buyer similarly agrees to purchase all or a portion of their requirements of a product or service from a particular seller. Because exclusive dealing arrangements restrict trade, they are subject to antitrust liability under the Sherman Act or the Clayton Act.
The Sherman Act is codified in 15 U.S.C. §§ 1-38, and was amended by the Clayton Act in 1914, which is codified in 15 U.S.C. 12-27.
Exclusive dealing is not per se or presumptively illegal under either the Sherman Act or the Clayton Act, and are therefore subject to the Rule of Reason. As a result, antitrust liability resulting from an exclusive dealing arrangement depends on the probability that performance of the contract will foreclose competition in a substantial share of the line of commerce affected.
In making this rule of reason analysis, the court will consider whether the exclusive dealing arrangement in question has any pro-competitive benefits which outweigh its effects restricting trade. Additionally, the court will consider if those pro-competitive effects could be achieved through a less restrictive agreement.
[Last updated in October of 2022 by the Wex Definitions Team]