26 Pages Posted: 4 Feb 2011
Date Written: February 3, 2011
This paper examines the unique vulnerability of small, atomistic sellers – including small businesses, farmers, ranchers, fishermen, professionals, and athletes – to buyer power abuses. Because of sunk costs in carrying out a chosen business or profession, atomistic sellers are likely to be more vulnerable to power abuses than are consumers. A second theme of the paper is the retailer's special gatekeeper role in the distribution system, a role that can convey buyer power at relatively small market share levels. Large retail chains, although possessing a market share of 10 percent or less, can wield substantial power in dealings with sellers, even very large sellers operating in oligopolistic markets. The article examines the degree to which US antitrust policy and case law is consistent with these emerging realities.
Keywords: Sherman Antitrust Act, Buyer Power, Gatekeeper Power
JEL Classification: K21, L49
Suggested Citation: Suggested Citation
Grimes, Warren S., Buyer Power and Retail Gatekeeper Power: Protecting Competition and the Atomistic Seller, 72 Antitrust L. J. 563 (2005). (February 3, 2011). Antitrust Law Journal, Vol. 72, 2005. Available at SSRN: https://ssrn.com/abstract=1754748