Legal Definitions - vertical price-fixing

Vertical price-fixing is when parties in the same chain of distribution, such as manufacturers and retailers, try to control the resale price of an item. This is different from horizontal price-fixing, which is when competitors on the same level, such as retailers throughout an industry, fix prices.

Price-fixing is the artificial setting or maintenance of prices at a certain level, which goes against the workings of a free market. It is usually illegal under antitrust law because it eliminates price competition and can harm the economy.

For example, if a manufacturer of a popular brand of sneakers tells retailers that they can only sell the sneakers at a certain price, this is vertical price-fixing. The manufacturer is trying to control the resale price of the sneakers and eliminate price competition among retailers. This can lead to higher prices for consumers and harm the economy.