MDPPACPB Regulations

Page 20 of 127
20 
 
15. Exclusive Supply, Long-Term Contracts, and Take-or-Pay Obligations 
    1.    Prohibition 
(1) No licensee, wholesaler, infrastructure operator, or supplier shall enter into 
any exclusive supply agreement, long-term contract, or take-or-pay obligation 
that has the object or effect of foreclosing market access or excluding 
competitors, without legitimate and proportionate justification under Section 
211(2) of the Act and Regulation 56 of these Regulations. 
    2.    Specific Prohibited Conduct 
Without limiting subregulation (1), prohibited conduct includes: 
 (a) Obligating a counterparty to source exclusively from one supplier to the 
exclusion of others; 
 (b) Imposing punitive take-or-pay terms disproportionate to investment 
recovery needs; 
 (c) Entering excessively long-term contracts that foreclose competitor 
access; 
 (d) Restricting or deterring lawful termination, supplier switching, or new-
entrant engagement. 
    3.    Authority Oversight 
The Authority may: 
 
(a) 
Set maximum permissible contract durations for different 
categories of market participants; 
 
(b) 
Mandate the inclusion of escape clauses or periodic review rights 
in long-term agreements (e.g., triennial re-opening or competitive tender 
rights); 
 
(c) 
Require the disclosure and registration of standard-form exclusive 
contracts for review. 
16. Tying and Bundling Practices 
    1.    Prohibition 
No licensee with market power shall condition the sale, lease, or supply of one 
product or service on the purchase of another unrelated product or service 
(tying) or offer bundled packages or service packages that result in market 
foreclosure, restrict buyer choice, or exclude effective competition in the tied 
or bundled markets. 
(2) Presumptively Unlawful Conduct 
Tying or bundling shall be presumed unlawful where: 
 
(a) 
The products or services are not technically or functionally 
dependent on each other; 
 
(b) 
The tied or bundled arrangement is not objectively necessary or 
efficiency-enhancing; 
 
(c) 
The conduct limits the ability of the buyer to choose alternative 
suppliers for any component of the bundle; 
 
(d) 
The overall effect is to exclude or disadvantage competitors in 
any affected market. 
(3) Prohibited Conduct 
Prohibited conducts under these Regulation include but are not limited to the 
following: