PWP Guitars, a popular market leader in the guitar manufacturing industry, has secured agreements with the two largest musical instrument dealers in America to sell only PWP guitars in their stores and not buy from their competition. Three of their competitors have filed suit as plaintiffs, alleging that this agreement prevents people from buying their products, and thus lessens competition and creates a monopoly. What specific violation would the plaintiffs claim is occurring?

Question

Quizplus · Accepted Answer

Exclusive dealing occurs when a supplier restricts who a dealer can purchase from or sell to, potentially leading to a reduction in competition by limiting the availability of competing products. In this case, PWP Guitars' agreements with the largest musical instrument dealers to exclusively sell their guitars could be seen as preventing competitors from accessing significant sales channels, thereby lessening competition.

PWP Guitars, a Popular Market Leader in the Guitar Manufacturing