Happy City has three distributors of milk products.Sam,who owns a grocery store,angers one of the distributors when he insists that additional milk be delivered on Christmas Eve.He annoys another distributor when he makes a delivery driver wait to deliver milk.The three distributors get together and discuss the fact that they like all the other grocers in town better than Sam.One of them has an idea that they should stop selling milk products to Sam.The milk distributors call their friends the meat distributors and talk them into not selling meat to Sam either.Sam hears about the plot and wants to stop it.Which of the following best describes the agreements between the distributors of milk and meat to not sell to Sam?
A) It would likely be a boycott.
B) It would likely be a horizontal distribution agreement.
C) It would likely be a vertical distribution agreement.
D) There is no descriptive term in antitrust law since this is simply an agreement among sellers who do not legally have to sell to any particular buyer.

Question

Quizplus · Accepted Answer

The situation described in the scenario fits the definition of a boycott, which is an agreement among competitors to withhold their products or services from a particular customer or group of customers as a form of coercion or punishment. This type of behavior is typically viewed as anticompetitive and can violate antitrust laws. Horizontal and vertical distribution agreements are typically lawful if they do not harm competition and are not used as a tool to boycott competitors. There is no indication in the scenario that the distributors have a legally binding obligation to sell to any particular buyer, so D is not the best answer.

Happy City Has Three Distributors of Milk Products