Secondary-line competition, also known as vertical competition, occurs when companies that produce products or services used in the manufacturing of other products or services compete against each other. For instance, companies manufacturing car parts may compete to sell their parts to car manufacturers.
Secondary-line competition refers to a form of vertical competition in which companies vie for the same customer base but provide distinct products or services. For instance, a grocery store and a restaurant may engage in secondary-line competition as they both cater to customers’ food needs, albeit with different offerings and dining experiences. Similarly, a clothing store and a jewelry store can be considered secondary-line competitors as they both offer fashion accessories but with different product lines. These examples highlight how companies can compete for the same customers while providing diverse products or services. Secondary-line competition benefits consumers by offering them more choices and variety in the market.
Secondary-line competition refers to competition between businesses that sell products or services that are complementary to those sold by a dominant firm.
Secondary-line competition is regulated under antitrust laws, which prohibit dominant firms from engaging in anti-competitive practices that harm competition.
Examples of anti-competitive practices in secondary-line competition include exclusive dealing, tying, and price discrimination.
Exclusive dealing is a practice in which a dominant firm requires a customer to purchase all or most of its products or services exclusively from the dominant firm.
Tying is a practice in which a dominant firm requires a customer to purchase one product or service in order to obtain another product or service.
Price discrimination is a practice in which a dominant firm charges different prices to different customers for the same product or service.
Secondary-line competition benefits consumers by providing them with more choices and lower prices for complementary products or services.
Secondary-line competition benefits small businesses by providing them with opportunities to compete with dominant firms and to offer complementary products or services.
The penalties for violating antitrust laws in secondary-line competition can include fines, injunctions, and damages.
Businesses can ensure compliance with antitrust laws in secondary-line competition by consulting with legal counsel, conducting regular compliance training, and implementing effective compliance programs.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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