law

market allocation

Market allocation is an illegal antitrust practice in which competing brokers or firms agree to divide a market among themselves, such as by geographic area, price range, or type of client or property, instead of competing. It violates federal antitrust law, specifically the Sherman Act, and can lead to fines and imprisonment. A single brokerage deciding on its own to specialize in a market is not market allocation.

Exam tip: Market allocation requires an agreement between competitors. One firm choosing its own focus is legal; two firms agreeing to split territory is not.
Example: Two brokers agree that one will list only homes north of Main Street and the other only homes south of it, which is market allocation.

1. The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

Answer & explanation

Answer: A. The Sherman Antitrust Act of 1890 prohibits conspiracies in restraint of trade, including these practices.

Related terms & state variants

antitrust group boycott price fixing tie-in arrangement

Sources

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Last verified: 2026-10-23