Exclusive contracts between buyers and sellers (and related conditional pricing agreements such as loyalty discounts) can be pro-competitive. But when the offering firm has market power, such agreements may enable it to establish or extend an effective monopoly. As a result, buyers can receive higher prices, lower quality, and less variety.
An investigation of conduct evaluates the market power of the offering firm in a relevant antitrust market, and the anti- as well as pro-competitive elements of the accused practices, including the likelihood that they will impede entry or expansion of competitors. Damages are determined by the actual harm to the plaintiff’s business, compared to its likely financial condition in a marketplace in which competition occurs without the accused agreements.