Which of the following is a horizontal agreement ?

The correct answer is - Cartel

Key Points

• Cartel
  • Cartels are a type of horizontal agreement where competitors in the same industry collaborate to control prices, production, or markets.
  • This practice is considered anti-competitive and is prohibited under various competition laws globally.
  • Horizontal agreements involve coordination among firms operating at the same level of the supply chain, unlike vertical agreements which occur between different levels (e.g., manufacturer and distributor).
  • Examples of cartels include agreements to fix prices, limit production, or divide markets among competitors.

Additional Information

• Exclusive distribution
  • An example of a vertical agreement, where a manufacturer grants specific distributors exclusive rights to sell their products in defined territories.
  • While not inherently anti-competitive, exclusive distribution can be scrutinized if it limits market access or restricts competition.
• Resale price maintenance
  • A vertical agreement where manufacturers dictate the price at which retailers must sell their products.
  • This practice can be anti-competitive if it restricts pricing freedom, but it is not a horizontal agreement.
• Tie-in arrangement
  • A vertical agreement where the buyer is required to purchase one product as a condition for buying another.
  • Such arrangements can reduce consumer choice and are subject to scrutiny under competition laws.