Market allocation or market division schemes are agreements in which
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 ...
divide markets among themselves. In such schemes, competing firms allocate specific customers or types of customers, products, or territories among themselves. For example, one competitor will be allowed to sell to, or bid on contracts let by, certain customers or types of customers. In return, he or she will not sell to, or bid on contracts let by, customers allocated to the other competitors. In other schemes, competitors agree to sell only to
customers in certain geographic areas and refuse to sell to, or quote intentionally high prices to, customers in geographic areas allocated to conspirator companies.
Antitrust
According to
Adam Smith
Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——†...
, people of the same trade seldom meet without the
conversation
Conversation is interactive communication between two or more people. The development of conversational skills and etiquette is an important part of socialization. The development of conversational skills in a new language is a frequent focus ...
turning to conspiring ways to raise prices and defraud the public. Market allocation is generally regarded as illegal in the United States, unless the
Department of Treasury or equivalent body authorizes it.
[United States Department Of Justice. Price Fixing, Bid Rigging, and Market Allocation Schemes: What they are and what to look for. RET. 22, OCT 2021. https://www.justice.gov/atr/file/810261/download]
References
Anti-competitive practices
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