Induction: Trade practices legislation - Exclusive dealing

... Exclusive dealing

Third line forcing is one type of exclusive dealing. A breach of the Trade Practices Act prohibition on third line forcing can occur whether or not the conduct has the purpose, effect or likely effect of substantially lessening competition in the relevant market. The factors that may result in conduct breaching the third line forcing prohibition are set out below. Roll your mouse over the blue, green and red elements in the following graphic to view a description of these three factors.

There must be three parties in the sale. These parties are:

The customer
The supplier of the product or service the customer wants to buy (supplier 1)
A supplier that provides another product or service (supplier 2).

The second supplier can be a totally separate company or could even belong to the same corporate group as the first supplier.

There must be a condition on the sale. This is that supplier 1 will only provide a product or service on the condition that the customer will purchase another product or service from supplier 2.

There must be:

One product or service that the customer wants to buy (represented as product 1 in the diagram)
Another product or service that the customer is being compelled to buy (represented as product 2).