Arrangement between actual or potential competitors, that is, undertakings operating at the same level of the production or distribution chain, covering, for example, research and development, production, purchasing or commercialisation. Horizontal agreements may restrict competition in particular where they involve price fixing or market sharing, or where the market power resulting from the horizontal cooperation causes negative market effects with respect to prices, output, innovation or the variety and quality of products. On the other hand, horizontal cooperation can be a means to share risk, save costs, pool know-how and launch innovation faster. In particular for small and medium-sized enterprises, cooperation can be important means to adapt to the changing market place.

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