The chain of Mega Hardware stores agreed with Lock Tight Manufacturing not to carry any brand of locks and door handles other than those manufactured by Lock Tight. Mighty Lock threatened to sue for antitrust violations. On what basis and under what statute(s) would Mighty Lock sue?
What will be an ideal response?
Mighty Lock would sue Mega Hardware for violation of antitrust laws because of Mega Hardware and Lock Tight's use of an exclusive dealing contract. Under Section 1 of the Sherman Act and Section 3 of the Clayton Act, exclusive dealing contracts are subject to a rule of reason and are illegal only if they have an anticompetitive effect.
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