petermc61 wrote: ↑
Tue Sep 19, 2017 11:38 am
Leo wrote: ↑
Tue Sep 19, 2017 10:57 am
petermc61 wrote: ↑
Tue Sep 19, 2017 10:50 am
I understand the sentiment but what I don't understand is how that translates into what brands SBM does or doesn't sell.
I think with La Bella it was us or them, but not both.
I understand that. What I don't understand is one of the world's leading economies why that is acceptable. In Australia, an attempt to do that would be seen as anti-competitive (contrary to the overarching interests of consumers) and would be open to prosecution.
In many countries (including Australia, last time I checked), anti-competition laws typically stop (a) anti-competitive agreements, (b) abuses
of dominant position, and (c) mergers having an anti-competitive effect on the market.
The prohibition against anti-competitive agreement are aimed more at preventing cartel collusion between horizontal competitors (competitors in the same level of a supply chain) or at price maintenance agreements between parties in vertical relationships (eg. between a manufacturer and a distributor).
Exclusivity clauses in agreements in vertical relationships (e. La Bella & Strings by Mail) are not usually considered to be anti-competitive agreements because they have a net positive effect on the market (by encouraging/enabling a manufacturer with a small market share to enter the market). This is especially so if the market shares of the parties to the vertical relationship don’t cross a certain threshold (~20% or 25% in some countries but I don’t remember Australia’s threshold).
The exclusivity arrangement can be a problem if one party has a dominant position in the relevant market (usually more than 50% market share) and the exclusivity arrangement is an abuse of that dominant position (eg. by preventing its competitors from having similar services from the other party to the relationship. In this case, if La Bella does not have a dominant position, even if it demanded SBM’s exclusivity (in this case, not even full exclusivity, just partial exclusivity), there is no abuse of dominant position to violate anti-competition laws.
The mergers prohibition (point (c)) can usually be ignored by anyone who’s not a lawyer dealing in mergers & acquisitions, or the marketing people who need to provide market share data to the lawyers .