Final answer:
Exclusive dealing is legal when it encourages competition among dealers, such as automakers selling only to their branded dealerships. Sizeable revenue from sales, threats of shipment cessation, or large market share dominance do not legalize exclusive deals; the intention to promote market competition does.
Step-by-step explanation:
Exclusive dealing is illegal when it limits competition by preventing other dealers or retailers from having access to certain products, leading to anticompetitive effects. An exclusive deal can be legal, however, if its purpose is to promote competition among dealers. For instance, automobile manufacturers like Ford Motor Company legally sell their vehicles exclusively to Ford dealers, and General Motors sells exclusively to GM dealers, an arrangement aimed at encouraging competition within brand-specific dealer networks.
It is not the size of the revenue involved, the threats of cutting off shipments, the size difference between the manufacturer and dealer, or the extent to which competitors are blocked (e.g., 10% of the market) that makes exclusive dealing legal. Rather, it's the intent behind the arrangement. Legal exclusive contracts are designed to improve market competition, whereas illegal ones seek to establish control over the market and suppress competition.