Horizontal territorial allocation is an agreement among

competitors Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...

at the same level of distribution of a product or service to solicit customers only within a certain geographic area. The competitors who agree to this type of arrangement will often reject business from customers in another's territory. Territorial allocation scheme results in an absence of

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indiv ...

in prices and choice of products for the affected customers.Antitrust Resource Manual 8 Identifying Sherman Act Violations
/ref> Such agreements can be illegal under antitrust regulation.

References

Anti-competitive practices {{economics-stub