Dual Distribution Restraints: Insights from Business Research and Practice

Abstract

Under dual distribution a manufacturer sells through both independent and vertically integrated channels of distribution. The hybrid nature of these arrangements has led to persistent questions in antitrust relating to the use and effects of dual distribution restraints. To date, two schools of antitrust thought have emerged. Recent changes in the law, together with the growing use of dual distribution in practice, have called attention to these questions and the views of the two schools. Addressing both, the relevant literature from business research and practice are gathered and examined. The findings support aspects of each school, but challenge others, especially those that address free riding, in important ways. Together the findings augment extant understanding of dual distribution restraints in antitrust.