What is market allocation and how is it illegal?

Market allocation is an illegal practice in which competing businesses agree to divide a market by allocating customers, territories, products, and/or pricing. This practice is illegal under antitrust laws in Kansas and across the United States. Market allocation eliminates fair competition between businesses, which can reduce the choice of products and services that customers have access to, and can raise prices for customers. It also allows larger, more powerful companies to use a monopolistic advantage by limiting the ability of smaller, competing businesses to succeed. Market allocation can happen in a variety of ways. For example, businesses may agree to divide customers, territories, and pricing by creating exclusive territories for each business, agreeing not to compete in the other’s area. They may also agree to sell certain products at specific prices, or not to sell certain products at all, both of which limit customer choice and force customers to pay higher prices. Market allocation is illegal because it limits competition and hurts consumers. The government enforces antitrust laws in Kansas to help protect competition and promote healthy, competitive markets. If businesses are found to be engaging in market allocation, they can be prosecuted and fined.

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