Market Allocation Agreements

Market Allocation Agreements are arrangements between companies to divide markets among themselves, agreeing not to compete in certain areas or with specific customers. For example, two businesses might decide that one will sell in the east while the other sells in the west. While this can help reduce competition and stabilize profits for the companies involved, such agreements can be illegal under antitrust laws, as they restrict competition and can harm consumers by leading to higher prices and fewer choices. Authorities monitor these agreements to ensure a fair and competitive marketplace.