Unpacking Antitrust: When Is A Monopsony, A Buyer's Monopoly, An Antitrust Violation?

The Short Answer: In a monopoly, a seller has market power to increase its selling prices to above-competitive levels. In a monopsony, a buyer has market power to lower its purchasing prices to below-competitive levels. A monopsony is an antitrust violation when a seller has monopsony power (serious market power over a buying market) and engages in exclusionary conduct resulting in antitrust injury.

Why Is that an Antitrust Problem? Aren't Below-Competitive Purchase Prices Beneficial To Consumers?:

• Courts and commentators say that while there may be short-term benefits of monopsony power, over the long run, where payments to suppliers of consumer goods and services are artificially suppressed the ultimate result is reduced output and therefore, higher prices for consumers. Suppressed payments to suppliers can also discourage development and innovation for the goods and services at issue as suppliers shift research and resources to other goods and services.