Beware of the Buyer

Conventional thinking about competition policy, whether in developed or emerging economies, focuses largely on harm to consumers and to market dynamics resulting from the abuse of seller power. In his prize-winning book, Competition Policy and the Control of Buyer Power: A Global Issue,1 Professor Peter Carstensen of Wisconsin Law School, challenges this thinking and offers the more provocative view that the oft-ignored abuse of buyer power poses at least as grave a threat to the competitive process as the abuse of seller power. He argues in fact that the exercise of buyer power is more dangerous not only because it is pervasive but also because it is easily ignored or justified on the basis that it generates lower prices and therefore enhances consumer welfare.