The principle of minimum differentiation, also known as Hoteling's law, is the behavior of businesses or goods and services to cluster. The clustering of goods is the rationality of producers trying to make their products similar. Free-rider is a market failure that results from the inefficient distribution of goods as some people consume more than the required share of the resources or pay less than the cost-share. Hoteling's law and the free-rider problem in the society relate are relatable. For instance, reducing pollution is an act that will benefit everyone in society. However, individuals tend to free-ride on other people's recycling efforts by promoting pollution with landfill rubbish. Therefore, the principle of minimum differentiation promotes the free-rider societal problem.