Simple English definitions for legal terms
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Vertical price-fixing is when manufacturers and retailers work together to set a fixed price for a product, controlling its resale price. This is different from horizontal price-fixing, which is when competitors on the same level, such as retailers, agree to set a fixed price for a product. Price-fixing is illegal because it goes against the free market and can harm the economy.
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.