What is the impact of horizontal price fixing on consumers?

Horizontal price fixing occurs when two or more competing businesses agree to set prices at a certain level, rather than allowing market forces to determine pricing through competition. This practice restricts the ability of retailers to offer competitive prices and can prevent consumers from benefiting from price reductions that would occur in a more competitive market.

When price fixing takes place, consumers lose the ability to influence pricing based on their preferences and shopping behavior, as the businesses involved effectively eliminate competition by coordinating their strategies. This coordination can lead to artificially high prices, limiting choices for consumers and potentially leading to a decrease in the overall quality or variety of products available in the market. Overall, horizontal price fixing undermines the fundamental principles of free-market competition, which should ideally empower consumers through choice and fair pricing.