Collusion is a form of secret agreement between two or more people. These individuals typically meet secretly, reaching an agreement which is designed to deceive or defraud someone else, an organization, or the government. Collusion can take a number of forms, many of which are illegal, and you may have found yourself the victim of a form of lesser collusion as some point, as for example when your friends all privately agree on which film they want to attend before contacting you.

In order for a charge of collusion to be proved, it must be demonstrated that the parties involved met knowingly and with the intent to deceive. If, for example, two companies meet and agree to a price-fixing scheme, this is collusion. If two companies just happen to set the same prices for their products, this would not be collusion, although many people would view it as highly suspect, and it could be considered a case of tacit collusion.

Another form of collusion might happen when someone attempts to commit insurance fraud by damaging a home or car with the assistance of someone else. People have also been known to commit collusion during divorce proceedings, with one partner pretending to have committed adultery so that the divorce will go through. To address this problem, many regions have established no-fault divorce laws, which allow people to divorce by mutual agreement.

Like other fraudulent activities, collusion may be heavily punished if the perpetrators can be found. In the financial world, collusion is seen a violation of free market rules, creating a situation in which companies defraud their investors and the public for profit, and as such companies are closely monitored for signs of collusion. Sometimes a situation called “tacit collusion” arises, where companies collude without verbally agreeing to, as might happen when companies peg their prices on one market leader, rather than setting them on their own.

Some games also involve collusion, especially poker. As a general rule, it's hard to commit collusion by accident. If you find yourself in a private meeting with someone or an organization and you are asked to cooperate with them in a way which seems suspect or potentially fraudulent, you may want to decline, to avoid being accused of collusion.