What is horizontal price fixing?

Horizontal price fixing involves collusion among competitors to control prices within the same market. This practice typically occurs when competing firms agree to set prices at a certain level instead of allowing them to be determined by market forces. Such agreements can lead to higher prices for consumers and reduced competition, as it prevents businesses from competing effectively against one another by setting their prices independently.

This form of price fixing is illegal in many jurisdictions as it undermines free-market principles. It prevents fair competition and can create market monopolies where consumers face limited choices and inflated prices. By contrast, the other options describe collusion in different contexts but do not specifically address the actions of competing firms in the same market: collusion among retailers or manufacturers has different implications in terms of market dynamics.