The distinction between horizontal and vertical restraints often determines whether a restraint is illegal per se or should be judged by the rule of reason test.

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This statement is true. Horizontal restraints are agreements between competitors at the same level of the supply chain, while vertical restraints are agreements between firms at different levels of the supply chain. The distinction between these two types of restraints is important because horizontal restraints are typically considered illegal per se under antitrust laws, while vertical restraints require analysis under the rule of reason test. Thus, understanding whether a restraint is horizontal or vertical is critical in determining how it will be evaluated by antitrust authorities.

The Distinction Between Horizontal and Vertical Restraints Often Determines Whether