This is the practice whereby a supplier refuses to supply goods to a dealer. Activities that amount to refusal to supply without reasonable justification may be prohibited under Section 17 and Section 20 of the Act.
A supplier may refuse to supply for various reasons, for example to control the retail prices at which its products are sold or to protect its downstream markets. A situation may arise in which a supplier recommends resale prices to its dealers and refuses to supply those dealers who do not resell at these prices. A dominant enterprise that controls an essential resource or facility may also attempt to protect its downstream business by refusing to supply the resource to competing downstream enterprises.
A dominant telecommunications carrier, for example, may, in the absence of competition law, favour its own internet service business by refusing to allow wholesale access to its network to competing internet providers. Anti-competitive effects may also arise when a supplier refuses to supply to a dealer unless the dealer agrees to an exclusive arrangement.