Question: The Rolling Stones produced a new four-disc DVD called Four Flicks. TGA Entertainment, the bands management company, made an agreement with Future Shop (FS) granting
The Rolling Stones produced a new four-disc DVD called Four Flicks. TGA Entertainment, the band’s management company, made an agreement with Future Shop (FS) granting FS the exclusive right to sell the DVD set to consumers. In return, the Stones received a larger portion of profits from the DVD than they would have through normal distribution. The music retailer HMV Canada anticipates huge demand for the DVD and wants to be able to sell it through its outlets. TGA refuses to sell to HMV because of the agreement with FS. Is this agreement valid under marketing law? Explain.
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The issue here is whether the distribution practice of TGA is discriminatory and therefore potentially reduces or eliminates competition Producers as a general rule may discriminate between customers through distribution policies If a practice discriminates it is a reviewable matter by the Competition Bureau Many common distribution practices are reviewable matters under the Competition Act If the activity is likely to result in a substantial lessening of or the adverse effect on competition in a market the Competition Bureau may seek a prohibition or other remedial order from the competition bureau for exclusive dealing tied selling market restriction ie territorial customer or other resale restrictions and refusals to supply to an existing or potential ... View full answer
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