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EDITORIAL : MERGER - BUYER POWER - MARKET POWER - PRICE DISCRIMINATION

Buyer power: A star is (re)born

Buyer power once featured prominently in the antitrust discourse, often used as a foil to arguments that a merger would enable supracompetitive pricing. As time passed, the utility of the market power argument diminished as agencies became more explicit in their guidance and began exploring the buyer power concept against the backdrop of price discrimination and other limiting considerations. The concept may still have utility in the new world, however, as part of a holistic analysis of anticompetitive effects with application both in the merger regime as well as in cases involving alleged monopsony abuses.

The well-traveled “Power Buyer” concept is frequently introduced in antitrust analysis. But – much like a famous guest that makes a splash at the party then quickly slips away unnoticed – it is rarely present at the conclusion of a case. Perhaps that’s because, like many controversial stars, it was misunderstood in its youth but destined to become warmly embraced in its golden years. Some commentators demand that a power buyer to be a shining star, i.e., an industry titan capable of enslaving its suppliers to selling at the barest levels of subsistence, doling out punishment to any dissident by threatening or imposing sanctions that could jeopardize the very existence of the supplier. This approach would foresee a power buyer existing (perhaps only) in circumstances in which the demand

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  • Baker Botts (Washington)

Quotation

John M. Taladay, Buyer power: A star is (re)born, May 2011, Concurrences N° 2-2011, Art. N° 35827, pp. 7-8

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