Understanding Refusal to Supply - Kuits Solicitors Manchester

Understanding Refusal to Supply

Understanding Refusal to Supply

10th March 2020 - Published by Claire Meyers

There is no compulsory requirement under the law that states a firm has to supply. The normal, commercial position for sellers is that they have a right to decide who they wish to deal with. This is not, however, necessarily the case when an entity holds a dominant position in the market. Here, our competition law specialist Claire Meyers outlines everything you need to know about a refusal to supply.

In circumstances where a company holds a dominant position, typically where the company has a market share in excess of 40%, the refusal to supply goods or services (or only supplying such goods or services on clearly unacceptable terms), can amount to a breach of the competition regime. Common examples of conduct by a dominant firm which may give rise to competition issues include:

  • Ceasing supply to existing customers;
  • Unwarranted changes to the terms of supply to existing customers;
  • Refusal to supply “essential” goods or services; and
  • Undue delay in concluding contractual relations.

However, it is worth nothing that conduct such as that set out above is not automatically anti-competitive and it may be possible for the dominant undertaking to justify its conduct.  For example, refusing to supply a customer may be acceptable where the customer has a poor credit rating or does not abide by “regular commercial practice”, where the customer’s orders are out of the ordinary or where there is a genuine unavailability of supplies.

If you believe you have been refused supply by a company unlawfully, then please get in touch with our specialist IP team on 0161 838 7816, or contact us here.

 

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