A boycott is an arrangement by two or more businesses to withhold patronage or to deal on unfavorable terms with a third party for purposes of reducing competition.
A group boycott is frequently alleged where it is claimed that two or more brokers conspired to refuse to cooperate or to cooperate on discriminatory terms with another broker; usually that other broker is perceived as being a “discount” broker offering a lower commission rate than the alleged boycotters.
To avoid allegations of participating in an illegal boycott, brokers must be careful not to discuss with one another or announce at either social or professional meetings how they will respond to the entry of a new competitor in the market.
- Occasionally, a claim of a boycott by brokers can involve providers of other related services.
- For example, such an allegation may be raised where two or more brokers agree to withhold advertising from a local newspaper because they were dissatisfied with the paper’s rates.