How Loyalty Discounts Between Firms Harm Competition When There Are Network Effects: FTC v. Surescripts
Exclusive contracts are vertical arrangements that restrict one or both parties to the contract from doing business with anyone else. These contracts may have pro-competitive benefits such as reducing costs and discouraging free riding. However, a firm may also use exclusive contracts to deny a rival sufficient scale to compete. Any analysis of the effects of exclusive contracts on competition must weigh the potential pro-competitive and anti...