Compliance with US antitrust laws impacts a number of distribution and marketing issues. A sample of the different issues facing a foreign company include:

Territorial and Customer Restrictions

Although a manufacturer may assign a specific territory to a distributor, it may be illegal to prohibit a distributor from selling the manufacturer’s products outside the assigned territory. Such limitations are not automatically illegal, but will be weighed as to their reasonableness in light of all relevant facts and circumstances.

Pricing

A manufacturer may not establish the prices at which its distributors resell its products. However, manufacturers are free to “suggest” resale prices or even unilaterally refuse to do business with a distributor that fails to comply with these suggested prices.

Product Supply

A requirement that a distributor obtain its entire supply of a particular product from the manufacturer (or similarly, refrain from handling any products that compete with the manufacturer’s products) may violate US antitrust law if the arrangement restricts a “substantial amount of trade.” A violation will occur if the manufacturer or distributor is a significant player in a concentrated market.

The foregoing limitations generally do not impact foreign companies conducting business through a sales representative.