Legal Definitions - group boycott

Definition: A group boycott is a concerted refusal to do business with a party to express disapproval of that party's practices. It can also refer to a refusal to deal in one transaction in an effort to obtain terms desired in a second transaction. Under the Sherman Antitrust Act, even peaceful persuasion of a person to refrain from dealing with another can amount to a boycott.

Examples:

• A group of competitors refuse to do business with a particular firm unless it refrains from doing business with an actual or potential competitor of the boycotters.
• A group of consumers boycotts a product or service to show displeasure with the manufacturer, seller, or provider.
• A union boycotts a former employer by stopping all dealings with them.
• A group boycotts a manufacturer who advertises on a radio station that broadcasts messages considered objectionable by the group.

These examples illustrate how a group boycott can be used to express disapproval of a party's practices or to gain market power by destroying or coercing rivals. However, group boycotts can violate the Sherman Antitrust Act and are analyzed under either the per se rule or the rule of reason, depending on the nature of the boycott.