Market restriction refers to the practice by which a supplier, as a condition of supplying goods to a customer, requires that customer to supply these or any other goods, for example, in a prescribed market. This practice leads to a restriction of intra-brand (same brand) competition and may be prohibited under Section 17, Section 20 and Section 33 of the Act. An example of a situation in which market restriction may occur is where a supplier offers dealership contracts only in defined areas so that each dealer has control over particular areas and as such does not compete with other dealers. In effect each dealer acquires a monopoly status in its defined area.
Market restriction may, however, be permitted under Section 33 of the Act if it is found to be temporary and/or it is practised between interconnected companies.