Assume that Allied has required Cicada to not handle any of Allied’s c

QUESTION

Assume that Allied has required Cicada to not handle any of Allied’s competitors’ products. Which of the following most strongly suggests that this requirement is illegal?

A) Allied also pursues exclusive agreements when it buys materials for its operations.
B) Allied’s exclusive arrangements have prevented other suppliers from entering the market.
C) Cicada’s market share is greater than that of the other large real estate companies that Allied sells to.
D) Allied and Cicada have maintained this exclusive relationship for decades, although both parties could have ended it by providing notice 60 days in advance.
E) Cicada and Allied both expect to benefit by having more reliable and dependable supply chain partners.

ANSWER

Answer: B
Explanation: B) Choice B implies that the arrangement is lessening competition, which makes it more likely that the requirement is illegal. Choice A doesn’t matter, as the arrangement when Allied is the buyer is another issue. The issue at hand is the requirement when Allied is the seller. Choice C says that Cicada has market power, but that’s not a problem here because the requirement limits what Cicada can do. If Allied had too much market power, then that would be a problem, but that’s not what Choice C says. Choices D and E suggest that the requirement is fair and voluntary.