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An oligopoly (from Greek ὀλίγος, oligos "few" and πωλεῖν, polein "to sell") can be referred to as a market in which control over an industry lies in the hands of a few large who own a large share of the market. Oligopolistic markets can be described as having homogenous products, few market participants and inelastic demand for the products in those industries. As a result of the significant market power firms tend to have in oligopolistic markets, these firms are exposed to the privilege of influencing prices through manipulating the supply function. in addition to that, these firms can be described as mutually interdependent. This is because any action by one firm is expected to affect other firms in the market and evoke a reaction or consequential action. To remedy that, firms in oligopolistic markets often resort to collusion as means of maximising profits.

Many industries have been cited as oligopolistic, including civil aviation, electricity providers, the telecommunications sector, Rail freight markets, food processing, funeral services, sugar refining, beer making, pulp and paper making, and automobile manufacturing.

Many jurisdictions deem collusion to be illegal as it violates competition laws and is regarded as anti-competition behaviour. The EU competition law in Europe prohibits anti-competitive practices such as price-fixing and manipulating market supply and trade among competitors. In the US, the United States Department of Justice Antitrust Division and the Federal Trade Commission are tasked with stopping collusion. In Australia, The Australian Competition and Consumer Commission(ACCC) issued the Federal Competition and Consumer Act 2010, whose mandate is to preserve and promote market competition by prohibiting or regulating anti-competitive agreements and practices. Although aggressive, these laws can only apply when the firms engage in formal collusion such as cartels. This means that corporations can evade legal consequences through tacit collusion, as collusion can only be proven through actual and direct communication between companies.

Oligopolies are assumed to be aware of competition laws as well as the repercussions that they could face if caught engaging in anti-competition behaviour. In lieu of being explicit, firms may be observed as engaging in coordinated interactions such as price leadership. Due to their mutually interdependent nature, firms can display parallel behaviour such as charging similar prices without it being considered as collusion.

Oligopolistic markets achieve maturity when players in the market learn that they realise more profits through joint efforts designed to maximize price control by minimizing the influence of competition