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Antitrust Law’S Harm To Competition: A New Understanding Of Exclusivity, Ittai Paldor

Buffalo Law Review

One of the long-accepted axioms of antitrust law is that the competitive danger posed by exclusivity agreements increases as the market share foreclosed by these arrangements increases. The larger the market share foreclosed by an exclusivity agreement, the less likely the arrangement is to be upheld by courts. And exclusivity arrangements foreclosing extremely large market shares are practically never upheld. The business community has responded by forsaking such arrangements (or concealing them). This Article challenges this very intuitive axiom. It shows that due to an unobserved feature of exclusivity, when extremely large market shares are foreclosed, the competitive danger posed …