Countervailing power: A new ground for economic efficiency?

Although the concept of countervailing power has been developed in the 1950s, it has always been used sparingly by the competition authorities. While facing powerful firms, small and medium enterprises (SME) are tempted to collude in order to improve their bargaining power. This article presents firstly the foundations and issues of the countervailing power. It then wonders whether the countervailing power could be considered as a motivation of economic efficiency. This analysis is based on a decision taken recently by the Swiss Competition Commission.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. 1. Faced with powerful companies, whether private or state-owned, small and medium-sized enterprises (SMEs) sometimes feel powerless to make their point in contract negotiations. They may then be tempted to react by joining forces in order to obtain better conditions. This defensive reaction gives them the power to compensate for the power their trading partners may have. 2. This contribution recalls the foundations of countervailing power and highlights the issues involved in using this concept to justify the existence of a cartel. In explaining how competition authorities use the concept, it asks, as in the recent decision of the Swiss Competition

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  • Swiss Competition Commission (Bern)
  • University of Fribourg


Olivier Schaller, Philippe Gugler, Countervailing power: A new ground for economic efficiency?, September 2009, Concurrences N° 3-2009, Art. N° 26519, pp. 26-34

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