Market Allocation: The Customers, Territories and Services Rivals Agree to Leave Alone

Market allocation antitrust cases concern agreements between competitors to divide customers, territories, products or services and leave each other’s business alone. A rival stops quoting a customer. An heir-location firm gives up a potential customer and shares the eventual fee. Cancer practices divide treatments between them. The agreement removes the alternative the customer should have had, and the person processing the missing quote or shared payment may know exactly why.

Price fixing controls the terms of the offer. Market allocation controls who will compete to make it. The arrangement can work through customer lists, geographic boundaries or a division of services, with the businesses keeping their separate names while agreeing which business each will leave alone.

Is It Unlawful for Competitors to Agree to Divide Territories?

Yes. The Justice Department prosecutes agreements between competitors to divide territories or customers and stop competing under the Sherman Act. Each company gives up the chance to win business in return for protection from the other.

The dividing line can be a state boundary, a list of existing customers or a particular service. The bargain is the same: the buyer loses an independent competing offer. A company can benefit by keeping a customer, receiving part of a rival’s fee or getting the next contract.

Calling the arrangement a collaboration raises a question we work through with you: what competition did the companies agree to give up?

Customer Allocation Through Fee Sharing

Customer allocation through sharing fees can work without price discussions: one rival steps aside and takes a cut of the other’s fee.

Kemp & Associates competed for contingency-fee contracts with potential heirs. According to the government’s criminal indictment, when competing firms’ solicitations overlapped, they allocated unsigned heirs under an arrangement favoring the provider that made first contact. They shared eventual contingency fees, and estate-specific records documented the allocations and splits.

The valuable thing being divided was the opportunity to sign an heir. A customer who might otherwise receive competing fee offers became business assigned between the firms. The firm giving up that opportunity could still share the fee. Losing the customer and losing the revenue were no longer the same thing.

Kemp pleaded guilty to the customer-allocation charge in 2019.

For someone working in estate research or accounts payable, the contact history shows the rivalry. The split payment shows what replaced it. We connect those records to the agreement behind the lost offer.

When Competitors Stop Quoting Selected Customers

When competitors stop quoting selected customers, antitrust evidence connects the missing offer to an agreement with a rival. The useful question is who decided to stand aside, for which customer, and what the other firm promised in return.

Teva provides a direct example. Under its deferred prosecution agreement, the company admitted agreeing not to provide a bid as part of customer allocation. A missing quote was how the agreement reached the customer.

Allocation can also leave the appearance of competition intact. In the civil case involving GS Caltex, Hanjin Transportation and SK Energy, the government’s account of military-fuel purchasing in South Korea alleged line-item allocations, withheld bids and deliberately high bids. A competing offer could remain on the buyer’s desk while the suppliers had already agreed who should win.

That account also described a conspirator undercutting the agreed cartel price while exploiting its knowledge that the other offers would remain above a competitive level. Different prices can therefore coexist with an allocation agreement. The government alleged that the arrangement made the U.S. military pay more for its fuel.

Quote histories show when a seller disappeared or began submitting losing offers. Shared bid errors and unusual competitor contacts give that comparison more context. Customer-specific instructions can explain why. We connect those records with the benefit exchanged, whether a fee split, future work or installation work reserved for a losing bidder.

Florida Cancer Specialists Divided the Treatments

Under its 2020 deferred prosecution agreement, Florida Cancer Specialists admitted dividing cancer treatments with a competing oncology practice. Chemotherapy went to Florida Cancer Specialists, and radiation treatment went to the other practice. The division covered Lee, Collier and Charlotte Counties in Florida.

Cancer patients lost a competing option for the treatment they needed.

For a healthcare insider, this directs attention to the division of services as well as the bill. We examine how instructions about service offerings and patient referrals connect to the agreement between the practices.

The case shows why a market-allocation inquiry cannot stop at comparing prices for the same treatment. The agreement had already divided who would provide it.

A Territorial Proposal the Rival Refused

The highway crack-sealing case involved a rejected territorial proposal, a proposed $100,000 payment disguised through equipment terms and an attempted-monopolization plea.

Stolt-Nielsen’s Shipping Lists and the Dismissed Prosecution

Stolt-Nielsen carried bulk liquids, and its criminal prosecution concerned alleged customer and market allocation. The court’s memorandum and dismissal order describes journals and allocation lists supplied through the company’s cooperation with the government.

The court dismissed the prosecution, holding the government to its agreement protecting the company in return for cooperation.

The lists identified the business being divided. Journals could connect those allocations to the people arranging them. That is a more concrete account than a general suspicion about coordinated shipping prices.

A Revenue Pool at the Texas Border

The transmigrante forwarding case shows how allocation can operate through a shared pool of revenue. The business involved vehicle-export forwarding services near Los Indios, Texas.

The criminal indictment described a pool enforcing price and market restrictions, with extortion used to compel participation. In its account of the guilty pleas, the Justice Department reported admissions to price-fixing, market-allocation and monopolization conspiracies. The pool imposed prices, divided proceeds and enforced payments for individual transactions.

For a bookkeeper or competing agency, the customer transaction, pool payment and allocation instruction are parts of the same story. The agency did the work, but the arrangement determined how its proceeds were shared.

Service Areas Can Divide Who Buys the Work

Market allocation can also restrict the businesses a provider can approach for a contract. In the Blue Cross Blue Shield litigation, healthcare providers alleged that insurers divided the country into exclusive service areas covering insurance sales, employee benefit plan administration and contracts with providers.

The providers’ complaint described the arrangement this way:

The alleged restriction reached both sides of the insurance business: selling coverage and contracting for care. A provider seeking another insurer’s contract could run into the same territorial arrangement that divided insurance customers.

In the oncology case, practices admitted dividing treatments. Here, providers alleged that separate insurance companies restricted where each could contract. Both arrangements concern the alternative the customer or provider loses.

What the Quote Pattern Can Show

Territorial patterns become more informative when prices are compared with the cost of reaching customers, as the milk-bidding example shows.

The 2018 construction-bidding review describes stable market shares and unusually uniform prices as screening indicators. It also discusses market concentration and participation in trade associations as conditions relevant to cartel formation.

Bid Rigging in Public Procurement, a 2024 postgraduate thesis at the National and Kapodistrian University of Athens, explains why repeated purchases matter. Firms bidding for similar contracts over time can use bid rotation, taking turns winning work as their relationships develop. A concentrated market also makes coordination easier because the firms know their competitors.

The commercial pattern and the insider’s account answer different parts of the question. The pattern identifies which offers or customers changed. The account and contemporaneous records can show who agreed to the change, what each participant received and how the arrangement held together.

Market Allocation Whistleblower Rewards

Market allocation involving private customers can qualify for the Justice Department’s Antitrust Whistleblower Rewards Program. We assess how your information fits the program and its Postal Service connection.

When the allocated customer is the government, knowingly false bids or bills can support a False Claims Act case. The military-fuel cases combined allocation allegations with actual False Claims Act resolutions.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

We assess the customer allocation alongside the bids, statements and government payments it affected. Your knowledge of who was assigned the business can be the connection between the rivals’ agreement and what the government paid.

When You Know Why the Rival Stepped Aside

Contact our whistleblower experts if competitors assigned customers, divided territory or agreed which services each would leave to the other.