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Exclusive Rights

Exclusive Dealings

The term "exclusive dealing" is generally used to refer to the agreement between a supplier or manufacturer and its customer ( such as a distributor or wholesaler) where the customer is restrained from dealing with any of the supplier's competitors. The term generally includes express agreements, and also arrangements that the have the same exclusionary effect on competitors. For example, some manufacturers use "tie-ins", a requirement that a customer purchase all its needs from the manufacturer, forcing the customer to purchase the manufacturer's "full line." Competitors of the manufacturer then may be foreclosed from selling the customer all of the "tied-in" products.

Arrangements Restricting Competition

There is no general law in Hong Kong outlawing anti-competition practices. There are legislations or regulations restricting anti-competition measures. The best example is the telecommunication services in Hong Kong. The regulating body, the Telecommunication Authority regulates restrictive trade practices of telecommunication licencees through the powers given to him under the Telecommunications Ordinance and also through licensing conditions.

Refusing to Sell

The law does not outright condemn a supplier's refusal to sell or lease a product. This subject area is governed by the market rather than through the law. Henceforth, exclusive purchase right of a party can legitimately happen by virtue of a exclusive right provision under a contract. But care must be given to specific industry like telecommunication services.