Keywords: competition, Hong Kong, Collective boycott,

Collective Boycott

Don't Gang Up!

A collective boycott, or a collective refusal to deal, occurs where two or more businesses collectively refuse to deal with a third party. While businesses are free to choose their business partners, ganging up to exclude an actual or potential competitor can be considered anti-competitive.


A boycott is an effective way of inflicting targeted harm on other players in a relevant market. There can be various reasons for effecting a boycott, including (1) to prevent market entry or to drive a player out of the market, (2) to enforce the terms of a cartel against a 'rogue' member (e.g., to punish discounting in violation of a price fixing arrangement), or (3) to prevent or delay innovation or new business models.


Collective boycotts may have a horizontal or vertical aspect, or both, or it may be driven by a trade association or consortium of businesses. Examples of the different forms a collective boycott can take include: (1) refusal of a trade or industry association to admit a new member; (2) an agreement among suppliers that impact customers; (3) an agreement among customers that impact a supplier; or (4) an agreement between competitor and a common supplier, or suppliers, to deny you access to an important resource or facility.


Any form of conduct that involves ganging up to exclude an actual or potential competitor from the market without objective business justification may amount to a boycott, for example:

  • Terminating business relationships with a third party in a coordinated manner;
  • Setting exclusionary membership requirements to prevent a competitor from joining as a member; or
  • Refusing to supply an important resource or facility1, or only supplying it on unreasonable terms.


A collective boycott may, depending on the circumstances, be justifiable on the following grounds:

  • Efficiency considerations such as establishing more efficient distribution channels, reducing costly supply arrangements or lowering product costs;
  • Protecting the safety and security of a system or network; or
  • Protecting incentives to invest and innovate.

Next Week

Next week we will look at Resale Price Maintenance (RPM), a type of agreement commonly entered into between businesses operating at different levels of a relevant market.

Originally published 29 April 2015

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