Vertical price fixing

An illegal arrangement whereby a retailer collaborates with its supplier to resell an item at an agreed-on price. This does not mean that manufacturers cannot suggest to retailers a price at which they would like to see an item sold. But they cannot establish with the retailers a price for resale, nor they can legally threaten retailers with supply cutoffs if they do not sell at the recommended price. This is also sometimes referred to as resale price maintenance or fair trade.