Monopsony and Buyer Power

Summary

This practice note discusses the concept of monopsony and how it is interpreted in the United States' federal antitrust laws. Broadly, monopsony occurs when a buyer or group of buyers gain market power and the accompanying ability to harm competition among upstream input providers. Monopsony is often described as the mirror of monopoly, but instead of focusing on the seller, monopsony focuses on the buyer. This practice note breaks down the elements of both Section 1 and Section 2 claims premised on monopsony, including overviews of recent cases where the court provided helpful in-depth analysis on the interplay between monopsony and antitrust law. This note also includes a brief example of how a monopsony theory of harm can impact antitrust merger review in the United States. The note concludes with guidance for practitioners.