Editing Exclusive dealing (section)

== Industry impacts of exclusive dealing ==

Exclusive dealing can offer a significant competitive advantage for businesses, however it can also pose threats such as anticompetitive risks.The most commonly known issue of exclusive dealing is called Customer foreclosure.<ref>{{cite journal|title=When Does Exclusive Dealing Intensify Competition for Distribution - Comment on Klein and Murphy|last=Zenger|first=Hans|journal=[[Antitrust Law Journal]]|volume=77|number=1|pages=205–211|year=2010|ssrn=1762864}}</ref> Customer foreclosure is an exercise of market power by upstream suppliers, it occurs where a large number of customers cannot be accessed by the competitors, which in turn reduces the efficiency of these downstream firms.As a result of this the more dominant firm has the ability to reduce quantity or to increase the price of products at its disposal due to weakened competition from its competitors.<ref>{{cite journal|title=Exclusive Dealing, "Foreclosure," and Consumer Harm|last=Jacobson|first=Jonathan M.|pages=311–369|year=2002|journal=[[Antitrust Law Journal]]|volume=70|number=2|url=https://www.wsgr.com/a/web/179/jacobson_foreclosure.pdf|via=[[Wilson Sonsini Goodrich & Rosati]]|access-date=January 20, 2023}}</ref> This leaves customers vulnerable as there are forced to buy from the dominant supplier.<ref name="auto"/>

It is typically a seller who imposes exclusivity in the literature on exclusive dealing.The reason for the restraint of a seller may be procompetitive, such as preventing rival suppliers from:
* freely riding on the investments of the seller in the sales efficiency of a retailer.'''Efficiency reasons for exclusive dealing are''':
* Encouraging distributors to actively promote goods from a manufacturer
* Encourages suppliers to help distributors by proving more information
* Eliminating the free rider problem amongst suppliers
* Allowing the control of distribution quality by suppliers<ref>{{cite journal|title=Assessing Vertical Market Restrictions: Antitrust Ramifications of the Transaction Cost Approach|last=Williamson|first=Oliver E.|year=1979|journal=[[University of Pennsylvania Law Review]]|volume=127|number=4|pages=953–993|doi=10.2307/3311789 |jstor=3311789 |url=https://scholarship.law.upenn.edu/penn_law_review/vol127/iss4/17 |url-access=subscription}}</ref>

Exclusive dealing induced by the  seller may  also  lead to   anticompetitive behaviour. This is true if it leads to. a foreclosure that removes competitors from a large portion of the market for a prolonged time period.This is also true in the case of an entrant where the dominant incumbent can deter the entry of an efficient entrant though the practice of exclusive dealing. '''Inefficient results for exclusive dealing are''':

* Price decrease and an overall decrease in market output
* Increase in the dominant's firm's market share as well as the amount of product distributed
* Less competitors in the market as they are forced to exist due to exclusive dealing
* Incumbents have increase market power as they are bale to deter entry of new entrants to the market<ref name="auto"/>