Refusal to Deal

Most states have statutes based on the Sherman Act permitting private businesses the right to choose the parties with which they do business unless there exists an anti-competitive purpose or motive, or when the alleged horizontal restraint of trade could produce the effect of anti-competition, even without any actual effect on competition.

Anti-Competitive Intent

Antitrust Group Boycotts with anti-competitive intent are illegal as well. However, antitrust authorities need to establish that an agreement exists.

Without anti-competitive intent, the Sherman Act "..does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal." However, this right is not unqualified.

Unlawful Refusal to Deal

A form of unlawful refusal to deal is when a monopolist controls an essential facility not easily duplicated, and then denies the use of that facility to competitors even when sharing it would be feasible. Under Verizon v. Trinko, there must also be a lack of regulatory oversight from an agency with the authority necessary to compel access to the facility in order for there to be a finding of illegal refusal to deal.

The plaintiff in such a case must demonstrate that the facility in question is essential within the specific industry, that it would not be possible for the plaintiff to compete with the defendant without it, and that compelling the defendant to allow others the use of this facility would not impede the defendant's ability to serve its own customers. These elements are often difficult for plaintiffs to establish.

This "essential facilities" doctrine is most frequently applied to natural monopolies (such as utilities and transportation facilities), or when one competitor refuses to sell materials protected by patent or copyright.

However, courts have held that owners of intellectual property have a right to refuse to deal with competitors when it comes to products featuring that property. There is no legal duty to aid competitors.

We Can Help

Are you facing allegations surrounding a refusal to deal with your competition? Antitrust Attorneys at The Blanch Law Firm have the knowledge to defend you from such improper claims.

Contact one of our experienced attorneys by calling (917) 472-9883 or toll-free (866) 690-9316. Your initial consultation is both free and confidential.