Looking at the Monopsony in the Mirror

Abstract:     
Although still a distant second to monopoly, buyer power and monopsony are hot topics in the antitrust community. Despite the increasing interest in monopsony and buyer power, relatively few cases have actually been brought. Given the relatively few antitrust cases, the legal standards for monopsony claims are less developed than for monopoly claims. In recent years, courts, competition agencies, and scholars in addressing monopsony begin with a simple premise: monopsony is the mirror image of monopoly. But as this Article contends, courts and agencies should be careful when importing monopolization standards for monopsony cases. What works for monopolization claims may not necessarily work for monopsony claims.

This Article discusses two key issues: first, how much market share must defendant possess to be a monopsony? If courts and agencies assume that monopsony is the mirror image of monopoly, should the agencies and courts use the same market share thresholds for monopsonization claims as in monopolization claims? Second, should agencies and courts use consumer harm as a threshold screen for monopsony claims?

Number of Pages in PDF File: 50

Keywords: antitrust, sherman act, monopsony, buyer power, consumer welfare, fairness, behavioral economics

JEL Classification: K21, L40, L41, D42, J42, L12

Accepted Paper Series