Murky Waters: The FTC Dives into Exclusionary Supply Contracts

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Although most supply agreements are a benign business reality, when favorable terms negotiated with a supplier foreclose the buyer's rivals from competing, the antitrust waters can get murky, and buyers, especially those with market power, risk government investigations and private litigation.

In a recent enforcement action, the Federal Trade Commission (FTC) on November 21 entered into a consent order with Pool Corporation, Inc. (Pool Corp.) that required the company to remove any provisions in its agreements with pool supply manufacturers that could prevent new entrants from gaining a foothold in the pool supply distribution market. Two days later, a pool dealer echoed the FTC complaint in a new class action suit against Pool Corp. alleging monopolization and seeking treble damages.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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