The evidence and analysis of monopsony power, including but not limited to, in labor markets #FTC-2018-0054-D-0007

Submission Number:
Albert Foer
District of Columbia
Initiative Name:
The evidence and analysis of monopsony power, including but not limited to, in labor markets
This comment addresses a gap in American law, applicable to industries in which very large buyers who lack the market share usually required for a showing of monopsony power nevertheless have tremendous bargaining power over dependent (but sometimes very large) suppliers, presenting the opportunity for coercive abuse of the relationship. In jurisdictions that regulate abuse of superior bargaining position, (ASBP) the concept typically includes, but is not limited to, a situation in which a party makes use of its superior bargaining position relative to another party with whom it maintains a continuous business relationship to take any acts such as to unjustly, in light of normal business practices, cause the other party to provide money, service or other economic benefits. Examples include acts such as request for provision of suppliers labor without compensation and coercive collection of contributions. In Japan, the provision has been applied to a mass retailers abusive conduct against its suppliers, such as retrospective discounts, requiring monetary contribution or dispatch of employees from the suppliers when the retailer is opening a new or refurbished store, and compelling the suppliers to purchase products unrelated to those stipulated in the contract. ASBP offers the potential of creating a more level playing field for suppliers with respect to some of our largest brick and mortar firms and on-line retailers. Albert Allen Foer,[Redacted] *I am founder and former president of the American Antitrust Institute, and currently a senior fellow there. In 2016, I drafted a working paper on this topic for the American Antitrust Institute (AAI) that appears on as AAI Working Paper No. 16-02. Such Working Papers do not necessarily represent the positions of the AAI. I am submitting this as a comment on my own behalf in somewhat abbreviated and slightly modified form. Footnotes and page numbers within the pages correspond to the full text available on the AAI website. Abstract U.S. law does not provide a remedy for a firms abuse of its superior bargaining position (ASBP) vis a vis another, weaker firm. Several of our major trading partners do have such a provision and there is enough to be learned from their experiences and from investigations by academics and international institutions to warrant a careful examination of how such a provision could be made to work within an American framework. This comment proposes a way for the FTC to begin assembling information upon which additional steps may be based.