Legal Definitions - horizontal price-fixing

Definition: Horizontal price-fixing is when competitors on the same level, such as retailers in an industry, artificially set or maintain prices at a certain level, contrary to the workings of the free market. This is usually illegal under antitrust law.

Example: A group of clothing retailers in a city agree to all sell a certain type of shirt for $50, even though they would normally sell it for different prices based on their own costs and profit margins. This is an example of horizontal price-fixing because the retailers are on the same level and are colluding to set a fixed price.

This type of price-fixing is harmful to consumers because it eliminates competition and can lead to higher prices. It is also illegal because it violates antitrust laws that are in place to protect consumers and promote fair competition in the marketplace.