Clayton Act - Reciprocal Dealing Arrangements - Explained
When Reciprocal Dealing Contracts are Illegal Under the Clayton Act
Written by J. Mance Gordon
Updated at April 20th, 2024
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What are Reciprocal Dealing Contracts?
This is an agreement where a buyer offers to buy a sellers goods under the condition that the seller buys other goods from the original buyer. These agreements are only illegal under the Clayton Act if there is a distinct anticompetitive objective with a substantial effect on the product market. Any pro-competitive justification may serve as a defense to a challenge to these practices.
Example: ABC Corp agrees to purchase machinery that distributes chemicals from a 123 Corp if the 123 agrees to purchase all of the chemicals from the ABC. This conduct will be illegal if a challenger can demonstrate that ABC and 123 have an anticompetitive objective that substantially affects the market for farmers purchasing these machines and chemicals.
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