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Could I Be Legally Forced To Compete With Another Business?

Businesses often work together and enter into several agreements, even if they consider themselves to be competitors. However, there are some agreements that may actually be illegal because they violate antitrust laws. One of these illegal agreements is the refusal to deal. If you are accused of this crime, you will need to work with your attorney to minimize any civil liabilities or criminal criminal fines.

A Refusal to Deal

An example of a refusal to deal is when two security contractors operate in neighboring communities. Rather than compete with one another by attempting to sell their security services at a lower price, the companies may agree to only seek out customers within agreed geographic boundaries. Refusal to deal eliminates competition from the market and typically leads to products and services becoming more expensive and of lower quality.

Being Coerced Into an Agreement

If there is evidence that another business used coercion to cause you to enter into a refusal to deal agreement, you will need to record any evidence of this act of coercion so that you can then report these behaviors to the police. Then, your company will be less likely to be found guilty of a refusal to deal.

Entering a Joint Venture

Sometimes, a joint venture might be confused for a conspiracy to refuse to deal. You might work with another company to bring a product to the market which you would not be able to create otherwise. As a result, you would be unable to compete with the company whom you entered the joint venture with.

Creating a Tying Arrangement

Another situation where a refusal to deal may be legal is a tying arrangement. Two businesses may be competitors, but one may offer a service that the other does not, but would see as being essential. For example, a physician may not perform a particular medical procedure and may refer patients to another physician. This would not be considered a violation of antitrust because the less experienced physician would not be able to offer the service anyway.

When You Don't Have Monopoly Power

If you do not have a monopoly power, it is unlikely that you will be charged with refusal to deal. If you own a landscaping business and refuse to offer landscaping services to a competitor's customers, but there are plenty of other landscaping services to choose from, you will not have monopoly power and will be less likely to be held liable for civil or criminal penalties. Regardless, you should consult with a commercial lawyer. To find out more, speak with someone like D.B. Clark Law Office.