Using collective consumer will in a call for lower prices. In these cases, market forces become built-in correctors for high price fixes. Sometimes, distrust among the price fixing companies could dismantle their market manipulation. Buyers with large purchasing power could also force better terms and break price fixing agreements.
This type of price fixing has been illegal since 1911. That's thanks to the Supreme Court's decision in Miles v. Park when the Court said price fixing violated the Sherman Antitrust Act. 2 Some manufacturers get around this through vertical integration. For example, Apple has its stores.
Price fixing provides firms with the ability to deter away from market competition – it is easier and more profitable to collude and set prices together than compete in a competitive environment. It puts less pressure on firms to keep prices competitive and victimizes customers.
Horizontal Price Fixing This involves an agreement by competitors to set a minimum or maximum price for their products. For example, electronics retail companies may collectively fix the price of televisions by setting a price premium or discount. 2. Vertical Price Fixing