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Monopsony and the Sherman Act: Consumer Welfare in a New Light

Gregory J. Werden

U.S. Department of Justice - Antitrust Division

March 23, 2007

The Weyerhaeuser case presents the scenario of a firm that successfully engages in exclusionary conduct, obtains a monopsony, and yet does not have any potential to injure the end users of its products. Rather, the conduct has the immediate effect of injuring competitors, and the longer-term effect of injuring input sellers. Commentators have argued that the antitrust laws are indifferent to latter injuries because they are concerned only with "consumer welfare." This essay demonstrates that Congress was, and the courts have been, far from indifferent to the plight of sellers exploited by monopsonies. This essay shows that Sherman Act cases referring to "consumer welfare" have not indicated that they meant end-user welfare rather than aggregate welfare. Finally, this essay argues that promoting consumer welfare is a goal of the Sherman Act, but only a goal, and that making end-user welfare the touchstone under the Act could have extraordinarily undesirable consequences.

Number of Pages in PDF File: 33

Keywords: antitrust, monopsony, welfare

JEL Classification: K21, L41

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Date posted: March 31, 2007  

Suggested Citation

Werden, Gregory J., Monopsony and the Sherman Act: Consumer Welfare in a New Light (March 23, 2007). Available at SSRN: https://ssrn.com/abstract=975992 or http://dx.doi.org/10.2139/ssrn.975992

Contact Information

Gregory J. Werden (Contact Author)
U.S. Department of Justice - Antitrust Division ( email )
450 Fifth Street, NW
9th Floor
Washington, DC 20530
United States
202-307-6366 (Phone)
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