Exclusive dealing is considered illegal in all circumstances except under which condition?

Exclusive dealing refers to arrangements where a supplier restricts a retailer from purchasing products from competing suppliers. It can raise antitrust concerns as it may limit competition in the marketplace. However, certain conditions can make exclusive dealing permissible under antitrust laws.

The correct answer revolves around the notion that if the exclusive arrangement is violated and shipments are cut off, it highlights a significant breach of contract or terms that could justify the exclusivity. In such a case, if a supplier or manufacturer does not fulfill its part of the exclusive arrangement, they may be legally obligated to honor other agreements with retailers, rendering the exclusivity unenforceable. This situation can shift the focus away from exclusive dealing being an antitrust issue, as competition may be restored if the dealing is not adhered to.

In contrast, other options do not effectively illustrate circumstances where exclusive dealing would be permitted. For instance, sales revenue being sizable or the size disparity between the manufacturer and dealer does not inherently justify an exclusive arrangement's legality. Similarly, blocking competitors from a certain percentage of the market does not encompass factors that would alone excuse exclusive dealing behavior. The legality of exclusive dealing is generally assessed on its impact on market competition, rather than just those specific metrics.