Group boycott
Encyclopedia
In competition law
, a group boycott is a type of secondary boycott in which two or more competitors
in a relevant market
refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott. It is a form of refusal to deal
, and can be a method of shutting a competitor out of a market, or preventing entry of a new firm into a market.
In the United States, such conduct can be held to violate the Sherman Antitrust Act
. Depending upon the nature of the boycott, the courts may either apply the rule of reason
, or hold that the boycott is illegal per se
. It may also be considered a form of civil conspiracy
.
Competition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
, a group boycott is a type of secondary boycott in which two or more competitors
Competition (economics)
Competition in economics is a term that encompasses the notion of individuals and firms striving for a greater share of a market to sell or buy goods and services...
in a relevant market
Relevant market
In competition law the Relevant market defines the market in which one or more goods compete. Therefore, the Relevant market defines whether two or more products can be considered substitute goods and whether they constitute a particular and separate market for competition analysis.The relevant...
refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott. It is a form of refusal to deal
Refusal to deal
Refusal to deal is one of several anti-competitive practices forbidden in countries which have restricted market economies. For example:-History:...
, and can be a method of shutting a competitor out of a market, or preventing entry of a new firm into a market.
In the United States, such conduct can be held to violate the Sherman Antitrust Act
Sherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
. Depending upon the nature of the boycott, the courts may either apply the rule of reason
Rule of reason
The Rule of Reason is a doctrine developed by the United States Supreme Court in its interpretation of the Sherman Antitrust Act. The rule, stated and applied in the case of Standard Oil Co. of New Jersey v. United States, 221 U.S...
, or hold that the boycott is illegal per se
Illegal per se
The term illegal per se means that the act is inherently illegal. Thus, an act is illegal without extrinsic proof of any surrounding circumstances such as lack of scienter or other defenses...
. It may also be considered a form of civil conspiracy
Conspiracy (civil)
A civil conspiracy or collusion is an agreement between two or more parties to deprive a third party of legal rights or deceive a third party to obtain an illegal objective....
.