Research Fellow Ignacio Herrera Anchustegui – “Buyer power in EU competition law: A comparative analysis of cases economic implications”

Buyer power in EU competition law: A comparative analysis of cases and economic implications 

This PhD research project aims to clarify what is the current state of the law concerning the treatment of buyer power under EU competition law. Buyer power is the situation in which the buyer or purchaser in an economical transaction enjoys of an appreciable degree of market power and by exercising such power can reduce the price of the goods and/or services it pays by reducing the amount of goods it buys. In simple terms, it is the reverse of a dominant seller –and in the extreme- of a monopolist (i.e.: monopsonist).

In EU competition law there is some, but rather little, literature addressing the issue of buyer power despite its practical and theoretical importance. This literature usually examines either buyer power in a general level, with a strong emphasis on the monopsony problem, or on a case by case analysis. This leads to the need of providing with a comprehensive general theory on the legal treatment buyer power should receive. To do so, the author has chosen to elaborate a comparison of the different typology of cases that are decided by the EU judiciary. This is, buyer power cases have been classified in accordance to whether they can be subsumed in the following scenarios: 1) the treatment of buyer cartels to create buyer power (art. 101 TFEU); 2) the treatment of dominant positions of buyers enjoying a dominant position (art. 102 TFEU); 3) the treatment of either the creation of a powerful buyer by a concentration, or the use of countervailing buyer power as a defense when declaring a merger compatible with the internal market; and lastly, 4) the treatment of buyer power in public markets under the application of EU public procurement. In order to make the comparison the case law of the EU judiciary (ECJ and GC) will be analyzed to determine whether there is a consistent treatment of buyer power or if the courts assess buyer power cases differently depending on whether we are facing one typology or case or another.

This thesis adopts an economically informed analysis of the law which requires not only understanding the economics behind buyer power but also choosing an economic policy upon which analyze the welfare effects of the current treatment to buyer power. In this sense, this dissertation adopts an interdisciplinary approach by borrowing knowledge from microeconomics and industrial organization.