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Developing the evidence of such an agreement in order to establish something more than dealer complaints followed by a termination can be challenging, but it is not impossible. Concerted action involving multiple suppliers can also pose competition law issues. Such an agreement may amount to a group boycott that could be challenged under federal or state antitrust law. Most supplier terminations are entirely lawful. But occasionally some cross the line, either because the supplier has market witte power and the supplier is exercising it to harm competition, or because the supplier has agreed with other firms to terminate a price-cutting distributor. In such cases, a careful analysis of the facts is required.
then a claim is in theory possible. But again, proving harm to competition can require a detailed understanding of the marketplace and the distribution system. Lacking market power, however, a supplier generally has the right to do business with whom it pleases. Thats the American way. Concerted action, what if your supplier terminates you because your competitors complain to the supplier? For example, they might complain that your pricing is too low and is hurting the market or their business. The central principle remains that a supplier can do business with whom it likes. It can terminate a distributor for pricing reasons even if it has previously received complaints from other distributors. Such a sequence of events is not by itself sufficient to establish an unlawful agreement or concerted action. But if there is evidence of an actual agreement between a supplier and some distributors to terminate another price-cutting distributor in order to raise, maintain, or stabilize pricing, such an agreement may be illegal.
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So how does this work in stoma practice? If you are buying widgets, your supplier accounts for 90 of the widget market, and it suddenly decides to stop selling to you, it is possible you are looking at an anti-competitive action that might violate the special rules that apply to monopolists or would-be. You would have to develop more facts to assess the strength of any such argument. If your suppliers market share is less than 40, it is very unlikely that you have such a claim. Above 60 to 70, you may, and in between 40 and 60 is a bit of a grey area (although some courts have held that certain percentages in this range either are, or are not, sufficient). Details of the market structure (are there significant barriers to entry? Are there significant barriers to other firms expansion?) may be important. Just because your supplier has market power and has terminated you, however, does not necessarily mean that you have a good claim. You would still need to prove that the termination has harmed competition; harm to your business is not by itself enough.
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Supply Chain, wholesalers, distributors, and retailers are dependent upon their suppliers for a supply serum of products. What happens when your supplier decides it no longer wants to deal with you? The answer, of course, depends on the facts. Lets break the question down into various possibilities. The main dividing line is between unilateral actions by the supplier and concerted actions (that is, actions in furtherance of an agreement or understanding with other firms or companies). Ill cover basic competition law here; keep in mind that you may also have contract or promissory estoppel claims. Unilateral action, if your supplier decides all by itself that it no longer wants to do business with you, it is generally within its rights to do so under the competition laws if it does not have market power. The concept of market power can become technically complicated, but it essentially means the power to raise prices above competitive levels for some significant period of time. Market power may not be immediately obvious, so we often use market share as a simple proxy for market power, at least to obtain a quick sense of the situation.