What are restrictive trade practices?
These include:
- Anti-competitive arrangements
Competitors must not enter arrangements that will substantially lessen competition in a market, which is deemed to be the largest area within which substitutable products are sold. Examples of anti-competitive conduct are market sharing and bid rigging (collusive tendering).
Any agreement between competitors fixing the price of goods or services is illegal. It is illegal for competitors to get together to fix prices or share markets. Informal arrangements made over lunch or on the tennis court may be held to be as illegal as formal written agreements.
Competitors are prohibited from getting together and restricting the flow of goods or services to another person. It is illegal to enter agreements (known as primary boycotts), which have the effect of excluding a person or class of persons from a particular market.
A supplier with substantial market power must not damage a competitor or competitive conduct generally.
It is illegal to supply goods or services on the condition that the buyer will not acquire those goods or services exclusively or principally from a competing supplier, where the arrangement is also likely to substantially lessen competition in a market ("tying"). A supplier must not supply goods or services on the condition that the buyer obtains other goods or services from a third party ("third line forcing").
It is illegal for suppliers to try to force resellers not to discount or not to advertise discounts (although they can set maximum prices). A supplier must not demand that resellers charge a specified minimum price. Provision of a recommended retail price is not illegal, if it is a genuine recommendation.
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