Horizontal Market Allocation

Horizontal market allocation is a practice where businesses agree to divide customers or markets among themselves to limit competition. For instance, two companies might decide that one will only sell in a specific geographic area, while the other covers a different region. This arrangement can help them maintain higher prices and profit margins, but it is often illegal under antitrust laws, as it restricts fair competition and can harm consumers by reducing choices and increasing prices. In essence, it undermines the competitive marketplace that benefits everyone.