Dave owns a trash removal and recycling company named Dave's Trash Heep. He only has one competitor in the trash removal market, Jim, of Jim's Junkyard Dogs, but he thinks that one competitor is one too many. Dave meets with Jim and they agree to divide the town into two separate districts. Each person agreed only to pick up trash in his own district. There was no procompetitive effect from allocating the town between them. What type of antitrust violation have Dave and Jim engaged in?

Question

Quizplus · Accepted Answer

Dave and Jim have engaged in a horizontal restraint by agreeing to divide the town into separate districts for their trash removal services, effectively eliminating competition between them within those districts. Horizontal restraints involve agreements between competitors at the same level of the market structure to limit competition, which can include dividing territories.

Dave Owns a Trash Removal and Recycling Company Named Dave's