CONCERTED BUYING POWER: ITS POTENTIAL FOR ADDRESSING THE PATENT HOLDUP PROBLEM IN STANDARD SETTING

Abstract

Some concerted exercises of buying power warrant per se condemnation as naked buyer cartels.1 Other such buying collaborations, however, warrant more permissive rule of reason treatment because they entail integration efficiencies, can protect against anticompetitive uses of seller market power, reduce costs for downstream consumers, and can thus be procompetitive in their net impact.2 In short, buying power sometimes becomes output-reducing monopsony or oligopsony power, while in other contexts it is outputenhancing and should be allowed or even encouraged as a matter of sound competition policy.3