What is Horizontal Price Fixing?

Horizontal price-fix involves agreements between retailers that are in direct competition with each other to have the same prices. As a general rule of thumb, retailers should refrain from discussing prices or terms or conditions of sale with competitors. Terms or conditions of sale may include charges for alterations, delivery, or gift-wrapping, or the store’s exchange policies. If a buyer or store manager needs to know a competitor’s price on a particular item, he or she can check advertisements or the Internet or send an assistant to the store to check the price. But the buyer or manager shouldn’t call the competitor to get the information or personally visit the store for fear that this information would be used against him or her in a price-fixing case. Further, retailers shouldn’t respond to any competitor’s request to verify those prices. The only exception to the general rule is when a geographically oriented merchants association, such as a downtown area or a shopping center, is planning a special coordinated event. In this situation, a retailer may announce to other merchants that merchandise will be specially priced during the event, but the specific merchandise and prices shouldn’t be identified except in advertising or through in-store labeling and promotion.

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