Collusion refers to the coordination of firms’ competitive behaviour. The likely result of such coordination is that prices rise, output is restricted and the profits of the colluding companies are higher than they would otherwise be. Collusive behaviour does not always rely on the existence of explicit agreements between firms. Collusive behav- iour can also result from situations where firms act individually but — in recognition of their interdependence with competitors — jointly exercise market power with the other colluding competitors. This is normally described as ‘tacit collusion’.

Source: Glossary of terms used in EU competition policy, Antitrust and control of concentrations, European Commission, 2002