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BUYER POWER AND RETAIL GATEKEEPER POWER: PROTECTING COMPETITION AND THE ATOMISTIC SELLER

Warren S. Grimes-2016-01-01
31

TL;DRAbstract

Buying power issues are critical for today's antitrust bar. Power buyers have faced recent antitrust challenges in industries such as health care, agriculture, and professional sports. The growth of highly efficient superstore retailers, such as Wal-Mart and Price/Costco, has focused attention on the effects of a large retailer's buying power. Despite the importance of buyer power issues, economic and legal analysis of these issues has stumbled, failing to address some old market realities as well as new marketing developments. The result has been inconsistent and poorly reasoned decisions, confusion about what the law is, and a failure to live up to antitrust's goal of protecting competition.

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Buying power issues are critical for today's antitrust bar. Power buyers have faced recent antitrust challenges in industries such as health care, agriculture, and professional sports. The growth of highly efficient superstore retailers, such as Wal-Mart and Price/Costco, has focused attention on the effects of a large retailer's buying power. Despite the importance of buyer power issues, economic and legal analysis of these issues has stumbled, failing to address some old market realities as well as new marketing developments. The result has been inconsistent and poorly reasoned decisions, confusion about what the law is, and a failure to live up to antitrust's goal of protecting competition.

Keywords

Competition (biology)Market powerBusinessPower (physics)ConfusionMonopsonyMarketingBarriers to entry

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