Refusal to sell

A free enterprise system not only presupposes the right of entrepreneurs to choose an occupation without dictation by the government but also without interference from other entrepreneurs, which implies that a competitive market free of monopolistic behaviour, discriminatory practices and other restrictions, is essential. Certain practices engaged in by suppliers in the distribution of their products, notably refusal to sell thus hindering free access to the market, may serve to distort the free market economy. Refusal to sell may be defined as the practice by a seller of refusing to sell to particular buyers or to a particular class of buyers. This implies that the sale of the product requested was not prohibited or controlled by law or regulation.

Three main types of refusal to sell may be distinguished: individual refusal to sell (the practice employed by one particular supplier with regard to a particular buyer or class of buyers); collective refusal to sell (an explicit or implicit agreement or conscious parallel action between suppliers to withhold supplies from a buyer or class of buyers); secondary boycott (action by a single enterprise or an agreement or concerted action between enterprises, the object of which is to coerce another enterprise or group of enterprises into refusing to deal with a third party).

Refusal to sell may take several forms. The simplest concerns a supplier's categorical refusal to sell to a particular buyer. However, less obvious forms exist. The supplier not wishing to supply a particular customer may employ delaying tactics or may agree to supply only on conditions which are clearly more onerous than those accorded to other dealers, in other words, on discriminatory conditions. In fact, such delaying tactics constitute a more subtle form of refusal to sell since their aim is either to put or maintain a customer in a position where he is unable to place an order (for example by refusing him catalogues, samples, reference books, etc, which he needs in order to make his choice) or to postpone without valid reason the execution of an order. Another disguised form of refusal to sell consists in a supplier offering to supply a similar product to the one requested but refusing to supply the exact product requested. This situation often arises in connection with a brand product which the supplier offers to supply without the brand label and in a different package.