Market sharing occurs when competitors agree to divide or allocate customers, suppliers or territories among themselves rather than allowing competitive market forces to work.
Market sharing can include:
- allocating customers by geographic area
- dividing contracts by value within an area
- agreeing not to:
- compete for established customers
- produce each other’s products or services
- expand into a competitor’s market.
Market sharing restricts competition, forces prices up and reduces choice on price and quality for consumers and other businesses.