Show Less
You do not have access to this content

Competition Policy and the Control of Buyer Power

A Global Issue

Peter C. Carstensen

This book provides a comprehensive overview of the economic and competition policy issues that buyer power creates. Drawing on economic analysis and cases from around the world, it explains why conventional seller side standards and analyses do not provide an adequate framework for responding to the problems that buyer power can create. Based on evidence that abuse of buyer power is a serious problem for the competitive process, the book evaluates the potential for competition law to deal directly with the problems of abuse either through conventional competition law or special rules aimed at abusive conduct. The author also examines controls over buying groups and mergers as potentially more useful responses to risks created by undue buyer power.
Show Summary Details
This content is available to you

Index

A Global Issue

Peter C. Carstensen

abuse of buyer power
competition policy for abusive unilateral conduct see competition policy for abusive unilateral conduct by dominant buyers
employment effects 89
favoring technology of insiders 21012
market regulation to remedy see market regulation to remedy abuse of buyer power
access
competitive harms from the existence and abuse of buyer power, exploitation of producers, seller access and discriminatory or total denial of access to the buying market 847
exclusion of competing producers from access to inputs as competitive risk 200201, 216, 218
information access concerns and merger policy 234
market access, limiting 67
multiple buyers, sellers need to have access to 545
open access to buying markets, opportunity improvement suggestions 1512
retail outlets 5864
seller access and discriminatory or total denial of access to the buying market 847
sellers’ access to multiple buyers 545
supplier access to third parties 126
Adjemian, Michael 48, 73, 77, 86, 244
advertising dynamics 634, 82, 92
agent use, buyer cartels and buyer groups 189, 19091
aggregate welfare
cartels and competition policy goals 16, 1718, 1920, 212, 25, 29, 33, 34, 36
and competitive harms and abuse of buyer power, monopsony abuse versus monopoly abuse 113
competitive harms from the existence and abuse of buyer power 96, 113
harm and buyer cartels 194, 195
Akman, Pinar 35
all-or-nothing contracts 456, 8081, 83, 96, 110, 122, 193, 194, 230
Amano, Takashi 170
Amazon 6, 11415
Angotti, Tom 6
arbitrage effects 7071, 85, 2334, 237, 271
Ashenfelter, Orley 54
Asker, John 180, 188, 220, 229, 238
auctions
auction-buying ring as cartel 182, 183
bidding auction model 229
Dutch auction suggestion 1312, 217
Australia
Austl. Competition & Consumer Comm’n v Australian Safeway Stores100, 125
buyer cartels 207, 212
Competition and Consumer Commission, licensing of producer cartels 1678
grocery industry as nationwide duopoly 135
merger law 267
TPC v Carlton United Breweries100, 1245, 207
Trade Practices Comm’n v Australia Meat Holdings Pty Ltd.267
unilateral exclusionary practices 1245
violations of the competition law through ‘unconscionable’ conduct 122
Aviram, Amitai 205
Axelrod, Robert 77, 238
Bailey, DeeVon 58
Baker, Donald 113, 197, 216
Baker, Jonathan 83, 98, 101, 196, 236, 257
Balto, David 196
Bar-Isaac, Heski 220
bargaining power 55, 136, 167, 24750, 25960
Baumer, David 159
Baumol, William 52
Baxter, William 150
Bell, Robert 250
Benet, Chloé 64
Bhattacharyya, Sugato 84, 213, 257, 259
Binet, Chloe 182, 222, 264, 265
Bjorkroth, Tom 121, 135
Blair, Roger 2, 12, 1718, 19, 21, 25, 27, 42, 467, 48, 83, 129, 163, 183, 187, 194, 195, 196, 247, 249, 255
Boeing 8, 93
Bohannan, Christina 24
Bork, Robert H 26
Botti, Mark 182, 215, 249
Bowman, Ward 187
Bradsher, Keith 50, 95
branded goods
high volume retailers with leverage over suppliers 2345
monopolistic competition and above-cost pricing 824
retail sales relationships for branded and generic goods 6
branded goods and buyer power definition 5866
access to retail outlets 5864
advertising dynamics 634, 82, 92
category captains 623
competitive harms 923, 989
defining markets in retail distribution 645
dominant brand 61
house brands or generics and consumer choice 60
product promotion 6061
regional market concentration levels 645
and resale price maintenance (RPM) 63
retailer excluding a product line, effects of 63
stocking fees and shelf space 612
switching costs 63
thresholds for concern about retailer buyer power 656
Brandeis, Louis 26, 27
BRICS, competition law coordination 279
Brodley, Joseph 185
Bruce, Bill 265
Brunet, Ed 190
Bullard, Bill 213
bundling, buyer-induced bundling of input purchases 934
Bush, Darren 114, 217
buyer cartels and buyer groups, competition policy see competition policy for buyer cartels and buyer groups
buyer power definition 3878, 271
all-or-nothing contract 456
branded goods see branded goods
conventional understanding 439
mutual entrenchment in market, incentives to engage in 489
price-cost relationships and costs of production 445
waterbed effect 46
buyer power definition, increasing relative power 6675
buyer as decider 6770
collective bargaining 724
commodity exchanges decline 679
direct purchase by buyer, negotiating advantage 678, 70
market’s inherent difficulty in overcoming buyer power 715
producer arbitrage, limited effectiveness of 7071, 85
public market price as unreliable basis for contract prices 6970
‘tournament’ system 73
buyer power definition, in input 538
buyer side, defining 568
elasticity of supply and demand 58
geographic scope of actual and potential sales 567
market failure and market power 55
multiple buyer access 545
number and size of potential buyers 57
producer defecting to new customer then regretting decision 535
producer selling to several buyers at once 57
producers facing high switching costs 58
sources of buyer power 536
specialized producers 56
thresholds for concern 58
buying groups see competition policy for buyer cartels and buyer groups, legitimate buying groups
Cai, Xiaowei 68, 75, 213, 229, 236, 238
Calabresi, Guido 33
Campbell, Thomas 196, 257
Canada
321665 Alberta Ltd. v Mobil Oil Can. Ltd.188
R. v Abitibi Power & Paper Co.188
Vancouver Malt & Sake Brewing Co. v Vancouver Breweries33
Wheat Board 164
Capps, Cory 40
Carameli, Leo 62
Carey, Benedict 89
Carlton, Dennis 51, 52, 82, 225
cartels
and aggregate welfare 1718, 20, 212, 25, 33, 34
competition policy see competition policy for buyer cartels and buyer groups
producer see market regulation to remedy abuse of buyer power, offsetting producer power, producer cartels
category captains 623, 87
Chen, Zhiqi 434
Cheng, Thomas 44, 93, 140, 143, 147
Chevalier, Judith 101
Clarke, Julie 135
Clarke, Roger 12, 43, 235
Cohen, Amy 49, 50, 68, 73
Cohen, Kalman 48, 112
Colino, Sandra 221
collective action 724, 11415, 1637, 16970, 199
collusion
buyer collusion to drive down input prices 1867
and merger policy 22830, 2368
monopsony powers and collusive practices 2, 4
tacit and secret, buyer cartels 2057, 21314
Comanor, William 20
commodities
commodity-specific market-facilitating regulations 157
exchanges decline 679
public authority to regulate marketing 1645
public commodity markets 57, 70, 85, 86
see also inputs
competition policy
elasticity of supply and adverse competitive effects 252
mergers creating buyer power 2413
mergers and price reduction from supracompetitive level 232
producer cartels and market regulation to remedy abuse of buyer power 168
and regulation of contract terms 161
competition policy for abusive unilateral conduct by dominant buyers 11738, 272
competition policy for buyer cartels and buyer groups 2212
and exploitation of monopoly powers 11920
policy implications on limits of direct remedy for monopsony 137
waterbed effect 119
competition policy for abusive unilateral conduct by dominant buyers, regulatory doctrines 11834
all-or-nothing contracts 122
and consumer welfare 12021
discrimination and refusals to buy, addressing 1234
Dutch auction suggestion 1312
goals of competition policy applied to monopsonistic conduct 1323
institutional problem of continued oversight 132
and overbidding 12830
price offered for purchase as wrongful act 1223
recoupment proof, effects of 13031
remedying unreasonable exploitive and exclusionary conduct 1312
and requirements contracts 122, 1256
rules governing unjustified exclusionary use of buyer power 12431
seller conduct cases and legitimate business justification 1278
unilateral exclusionary practices by buyers 1245
unjustified exploitation of buyer power 11823
competition policy for abusive unilateral conduct by dominant buyers, structural remedies to avoid monopsony risk 1337
concentration reduction and economies of scale 1345
differentiating between undue buyer exploitation and hard bargaining 136
dissolution remedy 135
efficiency gains concerns 136
competition policy for buyer cartels and buyer groups 179223, 2745
competitive risks from buyer power 184
distinguishing buying groups from cartels 1913
horizontal agreements 180220
vertical restraints 22023
waterbed effect 222
see also cartels
competition policy for buyer cartels and buyer groups, buyer cartels
and agent use 189
all-or-nothing contracts 194
auction-buying ring as cartel 182, 183
buyer collusion to drive down input prices 1867
competition policy rethink 21314
competitive harms and market justifications 1948
criminal penalties 2035, 2078
defectors 197, 204
definition 1869
economic incentives 184, 195
information exchanges 2056
input side of market focus 1867
labour supply agreements 205
market justification for 1968
public supervision, need for 1978
tacit and secret collusion 2057, 21314
competition policy for buyer cartels and buyer groups, legitimate buying groups
abuse of buying power to favor technology of insiders 21012
all-or-nothing contracts 193
buying activity integration 192
collective buying 199
competition foreclosure by selecting same supplier 202
competition policy, rethink 21419
competitive risks 199203, 21516
definition 19091
Dutch auctions consideration 217
economies of scale 192, 216, 217, 218
efficiency gains 190, 1989, 2023, 214, 21617, 218
exclusion of competing producers from access to inputs as competitive risk 200201, 216, 218
franchise model 191
incentive to reduce input prices 193, 200
price bargaining 199, 200
price elasticity 1923, 216
prices below a reasonable competitive level, risk factors 20910
resale price setting 201, 21819, 220
safe harbor standards 193, 203
size and purchase volume effects 2023, 21516, 217
standard-setting organizations 20910
competition policy, buyer power as challenge to 115, 26971
competition policy goals 1637
aggregate welfare 16, 1718, 1920, 212, 25, 29, 33, 34, 36
consumer welfare 16, 19, 22, 23, 24, 25, 32
and economic theory 1726
fairness and economic welfare 2630, 36
Kaldor-Hicks formulation and aggregate welfare 1920, 22
market competition, promotion and protection 3035
market failure issues 31
monopolies, existing 345
Pareto formulation and aggregate welfare 19, 22
producer welfare 19, 24
product differentiation and seller power 20
resale price maintenance (RPM) 20, 23, 27
restrictions on freedom to compete and exempt transactions 334
theory of the second best 26, 32
value subjectivity 2021, 23
competitive harms and abuse of buyer power 79116, 271
see also harms
competitive harms and abuse of buyer power, buyer power use to exclude competition 98105
branded consumer goods 989
and consumer welfare 1045
exclusive input buying 98100
foreclosure of competition 989, 100101
indirect exclusion 1034
predatory buying (overbidding) 1023
resale price maintenance (RPM) 99
small (new) firms and barriers to entry 101, 102, 1034
supplier refusal to deal, inducing 100101
and supply uncertainties 99100
competitive harms and abuse of buyer power, exploitation of producers 7998
and aggregate welfare 96
all-or-nothing strategy 8081, 83, 96
branded goods market 824, 923
buyer incentives to coordinate locations (geographic differentiation) 9092
buyer-induced bundling of input purchases 934
buyer’s possession of substantial but undisclosed information about short-term demand for inputs 889
category captain status and limitation of competitors 87
consumer welfare effects 84, 95, 967
contracting strategies 834, 868
double marginalization risk 834
dual input price system 80
government loan-guarantee program and risk factors 81
horizontal mergers, effects of 84, 956
income reduction to exploited producer 945
market information distortion 879
new entrant barriers and geographic differentiation 9091
prices below competitive market price 8084
retailers refusing to carry competing product lines 867
retailers and regional diversification 912
seller access and discriminatory or total denial of access to buying market 847
small firms, effects on 83, 84
stocking fees and slotting allowances 87, 92
upstream effects, passing on buyer power pressure 946, 97
waterbed effect 812, 83
working conditions 945
competitive harms and abuse of buyer power, monopsony abuse versus monopoly abuse 10516
and aggregate welfare 113
all-or-nothing contracts 110
and consumer welfare 113
cooperative production 115
and entry barriers 106, 107, 11213
foreclosure of competition 11415
harm measurement and market integrity 1059
innovation incentives 1089
institutional limits facilitate exploitation 11216
monopoly regulation issues 11314
monopoly–monopsony balance 116
monopsonist buyer decisional control, retaliation and discrimination 11112
output effect 1056
producer collective action issues 11415
producer incentive to increase production to offset reduced income 11011
product quality issues 1089
substitution effect 113
traditional measures of monopsonistic impact, understatement of effects 10911
waterbed effect 111
wealth transfers 1068
see also monopsony power
concentration levels 1345, 2335, 25051, 259
Connor, John 207
consumer choice, house brands or generics 60
consumer overcharge, and producer cartels 163, 169
consumer welfare 1, 9, 270
and buyer cartels 194, 195
and competition policy for abusive unilateral conduct by dominant buyers 12021
competition policy goals 16, 19, 22, 23, 24, 25, 32
and competitive harms and abuse of buyer power 84, 95, 967, 1045, 113
merger policy and controlling the creation of buyer power 242
proof of effect on 1456
contracts
all-or-nothing 456, 8081, 83, 96, 110, 122, 193, 194, 230
basic contract law 149
exclusive dealing 122
exploitation of producers 834, 868
forward contracting by suppliers 244
and general market conduct regulation 1514
public market price as unreliable basis for contract prices 6970
regulation of terms 161
requirements contracts 122, 1256
cooperative production, competitive harms and abuse of buyer power, monopsony abuse versus monopoly abuse 115
cooperatives 150, 1667, 169, 173
Cotterill, Ronald 48, 83
countervailing power 1637, 16870, 1967, 24750, 25960
Crane, Daniel 111
Crespi, John 12, 77
criminal penalties, buyer cartels 2035, 2078
Cropp, Bob 245
Curtin, John 264
Cyert, Richard 48, 112
Daskalova, Victoria 188
De Fontenay, Catherine 255
De Schutter, Olivier 3, 4
decider, buyer as 6770
defectors, buyer cartels 197, 204
delivered-pricing schemes 229
Desrochers, Debra 87
Devadoss, Stephen 50
developing countries 4, 56, 50, 110, 278
Devlin, Alan 183, 194, 196
Diamond, Peter 54
differential pricing regulation 123
DiLorenzo, Thomas J 11
direct purchase by buyer, negotiating advantage 678, 70
Dirlam, Joel 149, 151
discounts, secret, and buyer cartels 197
discriminatory practices 1234, 1446, 15051
see also exclusion; exploitation
dissolution remedy, and monopsony risk 135
Dobson, Paul 46, 60, 65, 82, 92, 191, 248
Domina, David 151, 173
dominant buyers, and unilateral conduct see competition policy for abusive unilateral conduct by dominant buyers
Dorman, Gary 51, 52, 182, 184, 208, 209, 212
downstream markets 169, 201, 21819, 220, 23940
Doyle, Chris 187, 189, 202, 249
Dutch auction suggestion 1312, 217
see also auctions
Easterbrook, Frank 31
economic theory, and competition policy goals 1726
economies of scale 1345, 1489, 192, 216, 217, 218, 246
Eddy, Melissa 115
efficiency effects
competition policy 18, 28, 136
competition policy for buyer cartels and buyer groups 190, 1989, 2023, 214, 21617, 218
exploitation of producers 81
and merger policy 227, 240, 2536, 258, 259
producer integration 171
elasticities of supply and demand 58, 1923, 216, 235, 2523
Elhauge, Einer 94, 239
Elliott, Porter 265
employment issues 46, 89, 54, 1534, 158, 167, 205
wage levels 45, 160, 161
entry barriers 101, 102, 1034, 106, 107, 11213, 202, 252
see also small firms
Epstein, Richard 160
Estache, Antonio 183
EU
and buyer cartels 181, 188, 207, 212, 222
competition law policy and consumer welfare 10, 121
Horizontal Merger Guidelines 225
merger system 34, 64, 2645, 266
restrictions on freedom to compete and exempt transactions 33
unilateral exclusionary practices 125
EU, cases
Boeing/McDonnell Douglas250
British Airways v Comm’n125
Carrefour/Promodes248, 264
Comité des Industries Cinématographiques des Communautés Européennes v Comm’n121
Competition Authority v Beef Industry Dev. Soc’y Ltd.181
Danish Crown/Vestjyske Slagterier173, 264
Enso/Stora222, 250
Fenin v Comm’n121
Fenin/SNS+Spain121
Friesland Foods/Campina173, 264
General Electric/Honeywell279
Gottrup-Klim Grovvareforeninger v Dansk Landbrugs Grovvareselskab212
Green Paper on Unfair Trading Practices112, 1212
Kesko/Tuko248, 264
Korsnas/AssiDoman Cartonboard222
Philips/Intermagnetics250
Rewe/Meinl182, 248, 264
T-Mobile Netherlands v Raad van bestuur van de Nederlandse Mededingingsautoriteit17, 207
Virgin/British Airways125
exclusion
abuses of monopsony power that focus on eliminating rival buyers, competition policy for abusive unilateral conduct by dominant buyers, regulatory doctrines, rules governing unjustified exclusionary use of buyer power 1245
competition policy for abusive unilateral conduct by dominant buyers 122, 12431
competition policy for buyer cartels and buyer groups 200201, 204, 216, 218
competitive harms from the existence and abuse of buyer power 80, 98100, 1034
and merger policy 228, 231, 247, 252, 253
retailer excluding a product line, effects of 63
supplier’s exclusionary practices in return for slightly better return 456
see also discriminatory practices; exploitation
exploitation
buyer power exploitation 1, 24, 27071
and competition policy 1, 24, 27071
competition policy for abusive unilateral conduct by dominant buyers 11823, 136
institutional limits facilitate 11216
market regulation to remedy abuse of buyer power 1456
and merger policy 2267, 23031, 242, 247, 252, 253, 2545
producer cartels 1689
of producers see competitive harms from the existence and abuse of buyer power, exploitation of producers
see also discriminatory practices; exclusion
Ezrachi, Ariel 11, 265
failing firm defense, merger policy 2567
fairness and economic welfare 2630, 36
fear factor 148, 177
Fee, C Edward 84, 96, 213, 231, 239
Feldman, Robin 24
Feuer, Alan 74
Finland, mergers and abusive buying practices 135
firm size effects 2, 57, 2023, 21516, 217
First, Harry 190, 191, 201, 218, 266
Fishman, Charles 235
Fitzsimons, Brian 206
Fleming, Olivia 67
floors (base line), imposing, market regulation 15861
Flores, Chris 257
foreclosure 989, 100101, 202
forward contracting by suppliers 244
Fox, Eleanor 266
franchise model 191
Freyer, Tony 30
Friedman, Richard 83, 163
Frischmann, Bret 114
Galbraith, JK 1612, 196
Ganesh, Aravind R 56
Gans, Joshua 255
garment industry, working conditions 945
General Electric 63, 99
geographic differentiation, exploitation of producers 9092
geographic market definition, merger policy 2457
geographic markets, selective bidding practices as means of entering different 104
geographic price discrimination, merger policy 227
Germany
merger law 2656
Permaswage Holding/Precision Castparts Corp.250
Gilson, Ronald 153
global buyer power 56, 2778
government loan-guarantee program 81
Granitz, Elizabeth 111
Greenhouse, Steven 50, 95
Grimes, Warren 23, 24
Haglund, Michael 75, 129
Hamilton, Neil 85
Han, Martijn 187, 189, 202, 249
Hannaford, Steve 50
harms
buyer cartels 1948
competitive see competitive harms
merger policy 22635, 242, 247, 252, 253, 2545
Harrison, Jeffrey 2, 12, 19, 42, 467, 58, 83, 187, 195, 247, 249
Hauter, Wenonah 3, 6, 43, 92
Hegar, Glenn 85
Hemphill, C Scott 33
Hepher, Tim 8, 93
Hicks, JR 19
Hirschmann, Albert O 10
horizontal integration of upstream production into single entity 17071
horizontal mergers, effects of 84, 956
Horton, Thomas 28, 29, 253
Hovenkamp, Herbert J 24
Huffman, Max 256
Hunnicutt, Lynn 73, 103, 227, 229
Hylton, Keith 90, 129
Iimi, Atsushi 183
incentives
buyer cartels and buyer groups 193, 195, 200
competitive harms from the existence and abuse of buyer power 80, 1089, 11011
merger policy and barriers to entry 252
income reduction, producer 945, 11011
Inderst, Roman 46, 82
India 50, 73, 74, 279
information access 879, 1546, 1745, 2056, 234
innovation 1089, 202, 227
inputs
buyer power in see buyer power definition, in input
competition policy for buyer cartels and buyer groups 1867, 193, 200201, 202, 216, 218
competitive harms from the existence and abuse of buyer power 80, 889, 934, 98100
horizontal consolidation in input industries 170
price, bidding up 745
see also commodities
institutional limits facilitate exploitation 11216
institutional problem of continued oversight 132
insurance, subcontractors providing 151
Intamano, Nisit 181
International Competition Network 143
internet sales 59, 76
investigation and potential liability triggers, merger policy 24753
investment incentive reduction 80
investment for new ventures 174
Ioannidou, Maria 11, 265
Ireland, Rye Invs. Ltd. v Competition Auth.250
Jacobson, Jonathan 51, 52, 117, 182, 184, 208, 209, 212
Japan 93, 140, 142, 143, 219
Jedličková, Barbora 135, 267
Jesse, Ed 245
joint ventures 1713, 190, 2023, 214
Jones, Harriet 8
Jones, William 24, 144, 182, 242, 269
Kahn, Alfred 149, 151
Kaldor-Hicks formulation and aggregate welfare 1920, 22
Kameoka, Etsuko 142
Kaserman, David 27
Kaysen, Carl 18
Kireyev, Alexei 50
Kirkwood, John B 6, 9, 11, 19, 21, 24, 32, 52, 82, 105, 106, 123, 1467, 168, 169, 212, 225
Klaus, Jared 7
Klein, Benjamin 46, 111
Klish, Julie 202, 215
Komesar, Neil 178
Kotsiris, Lamabros 180
Kovacic, William 112, 136, 206
Kraft Foods 69, 889, 95
Krattenmaker, Thomas 28, 46, 128, 2367
Kwoka, John 34, 213, 251, 258
labour market see employment issues
Lambert, Craig 255
Lambert, Thomas 214
Lancaster, Kelvin 26, 32
Lande, Robert 9, 19, 22, 32, 55, 88, 105, 186, 212
Larson, Lex 158
Leftwich, Richard 110
Leonard, Christopher 3, 9, 43, 47, 73, 81, 86, 90, 91, 108, 155, 164, 175
Leslie, Christopher 7, 183, 194
Levine, Jay 7
liability triggers, and merger policy 24753
Lindblom, Charles 26, 29, 32
Lipsey, RG 26, 32
loan-guarantee program and risk factors 81
Lopatka, John 129, 206
Luxottica 67
Macaulay, Stewart 148
MacCulloch, Angus 135
McChesney, Fred 31
McCoy, Kevin 170
McCraw, Thomas 21, 26, 27, 63, 99, 169
McGee, John 52, 197
Manning, Alan 12
marginalization risk, exploitation of producers 834
market
access, limiting 67
competition, promotion and protection 3035, 36
defining in retail distribution 645
definition focus and merger policy 2437, 251, 252, 259
and exploitation of producers 80, 83, 879
failure issues 31, 55
harm measurement and market integrity 1059
Herfindahl-Hirschman Index (HHI) 58, 21516, 25051, 259
inherent difficulty in overcoming buyer power 715
justification and buyer cartels 1948
multimarket firms 130
mutual entrenchment in 489
public market price as unreliable basis for contract price 6970
regional market concentration levels 645
specific market operation, effects of 57
market regulation to remedy abuse of buyer power 13978, 2724
market regulation to remedy abuse of buyer power, offsetting producer power, producer cartels 16270
collective action challenges 1637, 16970
cooperatives and output limiting 1667, 169
countervailing power 1637, 16870
exploitation of power 1689
price increases and output limiting 163
producers’ cartel that negotiates prices with buyers 72
public authority to regulate aspects of commodity marketing 1645
public interest-based oversight 1678
state authorization of private associations of sellers 1656
state-run agencies and marketing boards 164
third party collaborations 1667
worker pay and conditions 167
market regulation to remedy abuse of buyer power, offsetting producer power, producer integration 17073
cooperatives 173
efficiency considerations 171
horizontal integration of upstream production into single entity 17071
joint ventures 1713
producer combinations as excuse for buyers to combine 171
vertical forward integration 173
market regulation to remedy abuse of buyer power, public sponsorship of alternative markets for producers 1746
capital investment for new ventures 174
information about opportunities and options, lack of 1745
new buyers, challenges of attracting 1756
public subsidies 174
market regulation to remedy abuse of buyer power, regulation of buyer conduct 14061
ambiguity problems 148
competition policy and regulation of contract terms 161
conduct of large grocery chains in dealings with suppliers 1478
discriminatory buying practices authorization 1445
and economies of scope and scale 1489
fear factor 148, 177
floors (base line), imposing 15861
International Competition Network report 143
oligopoly markets and price controls 15960
and ombudsperson 1478
producers’ rights to establish minimum prices through use of marketing orders 159
prohibition on unjustified differences in prices paid by buyers 1467
strategic buyer conduct 14049
‘superior bargaining position’ abuse prohibition 142
unjustified discrimination and exploitation 1456
worker treatment 158, 160, 161
market regulation to remedy abuse of buyer power, regulation of buyer conduct, general market conduct regulation 14957
basic contract law 149
commodity-specific market-facilitating regulations 157
contract premium over cash market price 1512
contracts preserving buyer discretion and protecting producers from abuse 1523
cooperatives as agents for transactions 150
employment contracts, and covenants not to compete 1534
information disclosure of certain information about market transactions 1546
market-facilitating regulations 1567
monopsony and effects on labor markets 154
open access to buying markets, opportunity improvement suggestions 1512
opportunistic conduct, limiting 14950
protection of small retailers from discriminatory discounts 15051
Marshall, Robert 47, 58, 188, 204, 229, 238
Marvel, Howard 186
Mayne, Carrie 114, 217
Meier, Barry 182
Melamed, Douglas 33
merger, horizontal, effects of, and exploitation of producers 84, 956
merger policy and controlling the creation of buyer power 22468, 2756
all-or-nothing contracts 230
analysis framework 25960
arbitrage effects 2334, 237
blocking mergers 258
buyer power more durable than seller power 2359
collusive harms 22830, 2368
competition policy for mergers creating buyer power 2413
consolidation among downstream buyers, effects of 23940
consumer welfare 242
countervailing bargaining power 2479, 25960
defenses to merger enforcement 2537
efficiency claims 227, 240, 2536, 258, 259
elasticity of buying side 2523
enforcement of merger law 26067
exclusionary harms 228, 247, 252, 253
exploitive harms 2267, 23031, 242, 247, 252, 253, 2545
failing firm defense 2567
geographic market definition 2457
geographic price discrimination 227
harm arising from modest increases in concentration 2335
information access concerns 234
investigation and potential liability triggers 24753
market definition focus 2437, 25051, 252, 259
mergers with significant adverse price effects on selling side 251
new entrant difficulties 237, 2389
oligopoly potential 2378
post-merger market structure and changes in structure 24751
price discrimination concerns 2267, 234
price reduction from supracompetitive level 232
product market definition 2445
raising rivals’ costs, effects of 2389
seller power 257
selling markets and ‘SSNIP’ test 246
supplier’s switching costs, effects of increase 234
under-enforcement consequences 251
unilateral harm 23032
upstream effects 231, 23941, 2445, 252
validity of a proposed market, assessment of 2467
waterbed effect 2312, 24041
Meurer, Michael 47, 58, 188, 204, 229, 238
Meyer, Steve 262
Miller, Darrell 5
Miller, Joseph 227
Mills, David 46
monopoly power 345, 824, 11920, 15960
monopsony abuse versus monopoly abuse see competitive harms and abuse of buyer power, monopsony abuse versus monopoly abuse
monopsony power 38, 3952, 712
abusive buyer power risk 512
and all-or-nothing approach to buying 423
and buyer power, distinction between 478
change in input cost impact 4041
and competition policy goals 1323
conventional models 4043
and effects on labor markets 154
exclusionary abuses that focus on eliminating rival buyers 1245
exploitation conditions 412, 467
exploitation of producers 80, 83
monopsony abuse (buyer power harms competitive process) 4952
policy implications on limits of direct remedy for 137
risk, structural remedies see competition policy for abusive unilateral conduct by dominant buyers, structural remedies to avoid monopsony risk
wealth transfer and efficiency, lack of reward for 423, 4950
see also competitive harms and abuse of buyer power, monopsony abuse versus monopoly abuse
Morales, Alfonso 107, 115, 174
Morison, Carole 71
Morris, Derek 135
Mueller, Willard 69, 95, 163, 169, 197, 23940
Nain, Amrita 84, 213, 257, 259
Nelson, Jon 213
new entrant barriers 9091, 174, 1756, 237, 2389
Nocera, Joe 210
Noll, Roger 42
OECD, Green Paper on ‘unfair’ trade practices 10
Ogle, Maureen 3
Oinonen, Mika 59
O’Keefe, Brian 46, 50
ombudsperson role 1478
Onyanga-Omara, Jane 170
open access to buying markets, opportunity improvement suggestions 1512
opportunistic conduct, limiting 14950
output limiting, producer cartels 163, 1667, 169
overbidding (predatory buying) 1023, 12830
Page, William 206
Palamountain, Joseph 187, 235
Patinkin, Don 45
Pearson, Sandra 151
Penrose, Edith 45
Perloff, Jeffrey 51, 52
Piraino, Thomas 181, 185, 190, 193
Pitofsky, Robert 29
Poland, merger law 265
Poomipark, Chitanong 181
Posner, Richard 26, 113
predatory buying (overbidding) 1023, 12830
pricing
below competitive market price 8084
below a reasonable competitive level, risk factors 20910
branded goods market and above-cost pricing 824
and buying groups 1889, 1923, 199, 200, 216
controls, oligopoly markets 15960
delivered-pricing schemes 229
differences, prohibition on unjustified 1467
differential pricing regulation 123
discrimination and merger policy 2267, 229, 230, 232, 234
fixing, and buyer cartels 204
increases and output limiting, producer cartels 163
manipulation legalization 89
marketing orders 159
price offered for purchase as wrongful act 1223
price-cost relationships and costs of production 445
waterbed effect (increasing prices to other buyers to compensate for lost revenue) 46, 812, 83, 111, 119, 222, 2312, 24041
producers
arbitrage, limited effectiveness of 7071
cartels see market regulation to remedy abuse of buyer power, offsetting producer power, producer cartels
collective action issues 11415
combinations as excuse for buyers to combine 171
defecting to new customer then regretting decision 535
exploitation of producers see competitive harms from the existence and abuse of buyer power, exploitation of producers
facing high switching costs 58
incentive to increase production to offset reduced income 11011
integration see market regulation to remedy abuse of buyer power, offsetting producer power, producer integration
and marketing orders 159
selling to several buyers at once 57
welfare 19, 24
see also suppliers
product differentiation and seller power 20
product lines, exclusion effects 63
product market definition, and merger policy 2445
product promotion, branded consumer goods 6061
product quality issues 1089
production
chain and wealth transfers 107
mergers, productive efficiency gains outweighing losses from increased buyer power 240
mergers, specialization and switching capacity 244
and price-cost relationships 445
transferring productive activities to other locations 161
proof of effect on consumers 1456
public authority to regulate aspects of commodity marketing 1645
public interest-based oversight, producer cartels 1678
public market price as unreliable basis for contract prices 6970
public sponsorship of alternative markets for producers see market regulation to remedy abuse of buyer power, public sponsorship of alternative markets for producers
public supervision for buyer cartels, need for 1978
Ray, Daryll 77
recoupment proof, effects of 13031
refusal to deal, inducing 100101
regional diversification, and exploitation of producers 912
regional market concentration levels 645
regulation of buyer conduct see market regulation to remedy abuse of buyer power, regulation of buyer conduct
requirements contracts 122, 1256
resale price maintenance (RPM) 20, 23, 27, 63, 99, 201, 21819, 220
retailer excluding a product line, effects of 63, 867
risk factors
branded goods market 923
competitive risks, legitimate buying groups 199203, 20910, 21516, 218
double marginalization, and exploitation of producers 834
government loan-guarantee program 81
monopsony risk see competition policy for abusive unilateral conduct by dominant buyers, structural remedies to avoid monopsony risk
Robinson, Thomas 158
Rodger, Barry 135
Rogers, Richard 255
Rosenfelt, Natalie 186
Ross, David 29, 30, 51, 112
Rossi, Jim 113
Roth, Bette 34, 210
Roth, Randi Ilyse 81, 85
safe harbor standards, legitimate buying groups 193, 203
Salop, Steven 22, 28, 46, 128, 2367
Sandford, Jeremy 545, 58, 88, 234, 249
Schaffer, Harwood 77
Scheelings, Richard 11
Scherer, FM 20, 29, 30, 51, 112, 253
Schumpeter, Joseph 35, 71
Schwartz, Marius 234, 261
Scott, Alwyn 8, 93
Scully, Gerald 12
second best theory 26, 32
Sen, Amartya 19
Sexton, Richard 187, 238, 249, 255, 256
Shapiro, Carl 17
shelf space and stocking fees and shelf space 612, 87, 92
Shughart, William 31
Sidak, J Gregory 113, 209
Sisario, Ben 85
size, firm size effects 2, 57, 2023, 21516, 217
Skipper, Lihlani 107, 115, 174
small firms 56, 83, 84, 101, 102, 1034, 15051
see also entry barriers
Smith, Tyler 159
Smithfield 9091, 1556, 257, 262
Snyder, Brad 211
Sokol, Daniel 1718, 19, 21, 25, 183, 194, 196
Solomon, Elinor 227, 237
Song, Wongun 50
South Africa 181, 207, 2667, 279
Competition Comm’n v Patensie Sitrus Behrend Beperk125, 200
In re South African Raisins v SAD Holdings125, 200
Masscash Holdings & Finro Enter.267
specialization effects 56, 81, 244
sponsorship 1746, 19091
standard-setting organizations 20910
state authorization of private associations of sellers 1656
state-run agencies and marketing boards 164
Steiner, Robert 60
Stigler, George 512, 183
stocking fees and shelf space 612, 87, 92
Stokes, Susan 71
Storm, Stephanie 226
Strauss, Ben 210
Streitfeld, David 115
Strom, Stephanie 93
Strong, Peter 93
Stucke, Maurice 11, 20, 28, 29
subcontractors, insurance provision 151
‘superior bargaining position’ abuse prohibition 142
suppliers
access to third parties 126
competition foreclosure by selecting same supplier 202
elasticity of supply and demand 235
exclusionary favors from 231
exclusionary practices in return for slightly better return 456
exploitation 968
refusal to deal, inducing 100101
supply-side market structure 24950
switching costs, effects of increase 234
see also producers
Sweeney, David 190
switching costs 58, 63, 234, 244
Taylor, C Robert 42, 85, 151, 173
Taylor, Madeline 1478
Telser, Lester 187
Thailand 18081
third party collaborations 126, 1667, 191
Thomas, Shawn 84, 96, 213, 231, 239
Tor, Avishalom 205
‘tournament’ system 73
Turner, Donald 18
Uber 74
UK 62, 140
Mitchel v Reynolds33
regulation of major grocery chains 44, 142, 1478, 219, 2478
unilateral conduct and dominant buyers see competition policy for abusive unilateral conduct by dominant buyers
unilateral harm, and merger policy 23032
unjustified exclusionary use of buyer power see competition policy for abusive unilateral conduct by dominant buyers, regulatory doctrines, rules governing unjustified exclusionary use of buyer power
upstream effects 946, 97, 17071, 231, 23941, 2445, 252
Urbina, Ian 50, 95
US
Agricultural Marketing Agreement Act 159
antitrust policy and fairness 267
Beechnut-Heinz merger case 867
Capper-Volstead Act 165, 167
Chicago Board of Trade 150, 152
Clayton Act 22, 27, 150
collective bargaining 724
commodity exchanges decline 679
Department of Agriculture (USDA) 1434, 1456, 1512, 155, 175
Federal Trade Commission (FTC) Act 223, 141, 147
Grain Inspection Act 150
Horizontal Merger Guidelines 2245, 240, 246, 254
merger law 1011, 34, 26063
New England milk prices study 48
Packers and Stockyards Act (PSA) 68, 85, 88, 1412, 1435, 14950, 1512, 155
poultry industry ‘tournament’ system 73
resale price maintenance (RPM) 27
restrictions on freedom to compete 334
Robinson-Patman Act 123, 143, 1467, 149, 15051
Sherman Act 22, 27
transformation of rural America 23, 9, 11, 478, 50
US, cases
Adaptive Power Sols. v Hughes Missile Sys.7
Addamax Corp. v Open Software Found.210
All Care Nursing Serv. v High Tech Staffing Servs.180
Allen Bradley Co. v Int’l Brotherhood of Elec. Workers Local1667
April v Nat’l Cranberry Ass’n165
Arizona v Maricopa Med. Found.25
Balmoral Cinema v Allied Artists Pictures Corp.12021, 183, 207
Balmoral Theaters v United Artists204
Bd. of Trade v Olsen150
Been v O.K. Indus.44, 45, 77, 81, 85, 145
Bell Atl. Corp. v Twombly205
Boise Cascade Int’l v N. Minn. Pulpwood Producers Ass’n167
In re Brand Name Prescription Drugs Antitrust Litig.183
Brooke Group v Brown and Williamson130
Brown Shoe Co. v United States17, 28
Brown v Pro Football211
Bus. Elecs. Corp. v Sharp Elecs. Corp.221
Cape Cod Food Prod. v Nat’l Cranberry Ass’n165
Cargill v Monfort of Colo.90, 104, 130
Cason-Merenda v Det. Med. Ctr.5
Cerberus Institutional Partners263
Cobb Theatres III v AMC Entm’t Holdings7, 124, 207
Commodity Futures Trading Comm’n v Kraft Foods Group69, 237, 243
Cont’l T.V. v GTE Sylvania221
Conwood Co. v U.S. Tobacco Co.62, 87
Credit Suisse Sec. (USA) v Billing198
Del. Health Care v MCD Holding Co.180
DeLoach v Lorillard Tobacco Co.188
Discon v NYNEX189
E. States Retail Lumber Dealers v United States100, 187, 192, 200
Exxon Corp. v Maryland60
Fashion Originators Guild of Am. v Fed. Trade Comm’n195
Fed. Baseball Club of Balt. v Nat’l League of Prof. Baseball Clubs211
Fleischman v Albany Med. Ctr.5, 180, 187, 205
Flood v Kuhn211
In re Fresh and Process Potatoes Antitrust Litig.166
FTC v Cement Inst.229
FTC v H.J. Heinz Co.87
FTC v Ind. Fed. of Dentists34
FTC v Mylan Labs99, 1012, 125, 228
FTC v Super. Ct. Trial Lawyers Ass’n195
FTC v Superior Court Trial Lawyers Ass’n37
FTC v Sysco Corp.263
In re Genetically Modified Rice Litig.246
Growers 1–7 v Ocean Spray Cranberries166
In re High-Tech Emp. Antitrust Litig.5, 205, 206
Ice Cream Liquidation v Land O’Lakes89
Ins. Brokers Antitrust169, 189, 228
Intergraph v Intel Corp.24
Interstate Circuit v United States207, 228
iPic-Gold Class Entm’t. v Regal Entm’t. Group207
JTC Petroleum v Piasa Motor Fuels98
Kartell v Blue Shield of Massachusetts120, 2212
Klor’s v Broadway-Hale Stores76, 100, 124, 186, 192, 228, 231, 248
Knevelbaard Dairies v Kraft Foods89, 95, 123, 180, 239, 240, 243
Law v NCAA21011
Leegin Creative Leather Prods. v PSKS27, 34, 221
LePage’s v 3M94
LG Elecs. v Bizcom Elecs.24
Mackey v Nat’l Football League211
Mandeville Island Farms v Am. Crystal Sugar Co.120, 144, 162, 191
Re Max Int’l v Realty One127
Missouri v Nat’l Org. for Women39
Montague v Lowry100, 124, 186, 187, 200
In re Mushroom Direct Purchaser Antitrust Litig.166
NAACP v Claiborne Hardware3940
Nat’l Broiler Marketing Ass’n v United States166
Nat’l Macaroni Mfrs. Ass’n v Fed. Trade Comm’n188, 192
NicSand v 3M Co.63, 189, 202, 249
Northland Cranberries v Ocean Spray Cranberries165
Northwest Wholesale Stationers v Pacific Stationery182, 190, 199, 2089
NYNEX Corp. v Discon.100101
O’Bannon v NCAA210, 211
Omega Envtl. v Gibarco195
Pac. Bell Tel. v linkLine Commc’ns103, 104, 130
Pacific Stationery & Printing Co. v Nw. Wholesale Stationers208
Pickett v Tyson Fresh Meats71, 73, 85, 144, 151
In re Pilgrim’s Pride144
Polygram Holdings v FTC34, 100
Pool Corp.263
Quanta Computer v LG Elecs.24
Rambus119, 120
Rambus v Fed. Trade Comm’n210
Reed v Advocate Health Care5
Reid Bros. Logging Co. v Ketchikan Pulp Co.180, 186, 194
Schine Chain Theaters v United States125
Schumacher v Cargill Meat Solutions Corp.88, 155
Se. Milk Antitrust Litig.169, 245
Servais v Kraft Foods Group89
Shine Chain Theaters v United States7
Silver v New York Stock Exch.210
Smith v NCAA211
Smith v Pro Football211
Sony Elecs. v Soundview Tech.210
Stafford v Wallace68, 144
Standard Oil Co. v United States35, 71, 135
Swift & Co. v United States180, 242
Terry v Tyson Farms144, 145
Todd v Exxon Corp.180, 188, 192, 2045, 230, 250
Toys ‘R’ Us v FTC44, 65, 76, 100, 124, 186, 228, 231, 235, 248
Treasure Valley Potato Bargaining Ass’n v Ore-Ida Foods162
Treehouse Foods v Green Mountain Coffee Roasters99
In re Union Oil Co.210
United States v Addyston Pipe & Steel Co.33
United States v Adobe Sys.5, 180, 206, 238
United States v Aetna261
United States v Aluminum Co. of Am. (Alcoa)119
United States v Am. Broad. Co.120
United States v American Tobacco Co.35, 135
United States v Apple11415
United States v Blue Cross Blue Shield of Mich.101, 234
United States v Capital Serv.120
United States v Cargill260, 261
United States v CBS120
United States v ConAgra Foods2623
United States v Crescent Amusement Co.180, 207
United States v De Beers Centenary278
United States v E. States Retail Lumber Dealers Ass’n124
United States v Gen. Dynamics259
United States v Gen. Elec. Co.214, 278
United States v Griffith7, 125
United States v JBS S.A.261
United States v King166
United States v Microsoft126, 127, 136, 201, 221
United States v Nat’l Broad. Co.120
United States v Pennzoil Co.260
United States v Reading Co.119, 120
United States v Romer180
United States v Seminole Fertilizer Corp.183
United States v Swift141
United States v Taubman182, 192
United States v Topco Assocs.190, 192, 201, 209, 215, 218
United States v Trans-Missouri Freight267, 242
United States v United Health Group261
United States v U.S. Gypsum Co.88
United States v Visa USA126, 127, 201, 221
Verizon Commc’ns v Law Offices of Curtis V. Trinko71, 119, 120, 198
Vizcaino v Microsoft Corp.161
Vogel v Am. Soc’y of Appraisers2034
Volvo Trucks N. Am. v Reeder-Simco GMC147
W. Penn Allegheny Health Sys. v Univ. Pittsburgh Med. Ctr.234
Weyerhaeuser Co. v Ross-Simmons Hardwood Lumber75, 102, 120, 1289, 130, 144, 186, 238
Wheeler v Pilgrim’s Pride144
Woodman’s Food Mkt. v Clorox Co.62, 103, 146, 231
Vaheesan, Sandeep 26
Van Cise, Gerald 123
vertical integration and restraints 20, 28, 173, 22023
wage levels 45, 160, 161
see also employment issues
Wakui, Masako 44, 93, 140, 143, 147
Walmart 6, 8, 456, 923
Walsh, Mary Williams 94, 182
waterbed effect (increasing prices to other buyers to compensate for lost revenue) 46, 812, 83, 111, 119, 222, 2312, 24041
wealth transfers 1068, 256
welfare see aggregate welfare; consumer welfare
Werden, Gregory 31, 206
Western Organization of Research Councils (WORC), contract premiums 1512, 214
Williamson, Oliver 25, 113, 255
Woeste, Victoria 166, 197
Womack, Brian 170
Wright, Joshua 11, 61, 87
Zhang, Mingxia 187, 238, 249, 255, 256