Maintaining Open Markets in the Global Economy
Chapter 5: Vertical Restrictions and Market Access
5. Vertical restrictions and market access I INTRODUCTION In recent years the analysis of vertical restrictions has been developing rapidly and as a result policy attitudes have also been changing. A great deal of emphasis has been placed on the efficiency improving effects that various restrictions can have to overcome free rider problems and other externalities. The analysis can be applied to a wide range of restrictions imposed on the trading relations between manufacturers and their suppliers, and manufacturers and their distributors. Included on the list are selective distribution, exclusive dealing, territorial restrictions, tying and full-line forcing, and minimum price imposition backed in many instances by refusal to trade if the strict conditions are not met. The great variety of these restraints, used singly or in combination, and differing according to industry, make for a complex analysis and requires subtlety of antitrust treatment. At the national or regional level a softening of policy emphasis has therefore occurred, in recognition of the ways in which vertical restrictions may enhance efficiency (Comanor and Rey, 1997: 353). In contrast, at the international level there have been increasing claims that those same restrictions impede the entry of foreign products, foreclosed from the market by lack of access to distribution channels confined exclusively to domestic products. In some cases the complaints may extend to the home government which, while encouraging the active pursuit of antitrust policy towards domestic firms, may either do nothing to ensure equal treatment for foreign firms or, worse, connive at discrimination...
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