Geographic Allocation Agreements

by Jill & Cathy on April 9, 2021

Simple agreements between competitors for the distribution of distribution areas or the allocation of customers are almost always illegal. These agreements are essentially agreements not to compete: “I will not sell in your market if you do not sell in mine.” The FTC revealed such an agreement when two chemical companies agreed that one would not be sold in North America if the other did not sell to Japan. Illegal market allocation may involve assigning a certain percentage of the transactions available to each producer, geographically distributing distribution areas, or assigning certain customers to each seller. Most criminal proceedings include price fixing, supply manipulation or distribution or contracting systems. Each of these forms of cartels can be criminally prosecuted if they have intervened, at least in part, in the past five years. The evidence of such a crime does not require us to prove that the conspirators have entered into a written or explicit agreement. Price fixing, bid manipulation and other collusive agreements can be established either by direct evidence, such as the testimony of a participant. B, either through clues such as suspicious auction models, travel and expense notes, phone records and log notes. Our cartel advocates represent businesses and consumers who are harmed by market and customer allocation systems. A customer or market allocation conspiracy is an agreement between competitors, markets or customers for a product or service. The objective of the agreement is to eliminate competition for the market share determined by each competitor.

Market allocation is a situation in which competitors agree not to compete in certain markets by dividing geographic areas, product types or types of customers. Market allocation is another form of pricing. All horizontal allocations of the market are in themselves illegal. If there are only two computer manufacturers in the country and they enter into a contracting agreement in which Manufacturers A only sells to retailers east of Mississippi and sells Manufacturer B only to retailers west of Mississippi, they have created monopolies for themselves, in violation of the Sherman Act. Similarly, it is illegal for Producer A to sell only to retailers C and D and producer B to sell only to retailers E and F. Non-competition agreements that inappropriately impede competition may be contrary to federal and national cartel law. Illegal market distribution/customer distribution violates companies by eliminating competition for markets and customers. They also harm consumers by allowing conspiracy companies to charge them prices uncontrolled by the natural forces of supply and demand of an unmanipulated market. If, as a business or consumer, you have suffered financial losses as a result of an illegal contracting or customer awarding system, contact us today to schedule an evaluation of your case at no cost. The distribution of the market or the distribution of customers can be achieved by giving each competitor the exclusive right to deal with certain conditions: A: a limited non-compete clause is a common feature of transactions in which a business is sold and the courts generally authorized these agreements when they belonged to the main transaction, which were reasonably necessary to protect the value of the assets sold, and limited in time and scope.

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