(also Market division
) is an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories. It is one of several anti-competitive practices
outlawed in the United States
. The term is generally understood to include dividing customers as well.
For example, in 1984 FMC Corp. and Asahi Chemical agreed to divide territories for the sale of microcrystalline cellulose, and later FMC attempted to eliminate all vestiges of competition by inviting smaller rivals also to collude.