Wednesday, February 2, 2011
Posted by D. Daniel Sokol
My colleague Jeff Harrison (University of Florida - Law) has written a very good piece on Complications in the Antitrust Response to Monopsony.
ABSTRACT: The general idea of treating monopoly and monopsony similarly under the antitrust laws is supported by economic theory but is somewhat more complicated when one attempts to apply existing legal standards. The focus here is on some of the stickier issues that arise when antitrust is applied to monopsony. This analysis starts with a short review of monopsony theory. The purpose is to provide a context for the specific issues that are addressed in the following sections. The first complication concerns what is called the “all none supply curve.” This amounts to an argument that in some circumstances, monopsony may not be harmful. It then explores questions left open by Weyerhaeuser, issues of antitrust standing (a decision about those eligible to bring a private action based on a monopsony theory), the treatment of cooperative buying, and, finally, the treatment of monopsony in the context of some practices to which the application of United States antitrust law is currently somewhat muddled.