Domina Law Groupattorney Michael Stumo was a guest speaker during the American
Antitrust Institute’s(AAI) annual conference on June 22 at the National Press
Club in Washington,DC. Entitled “Buyer Power and Antitrust,”
the event showed that monopsony,or the Power Buyer problem, is gaining
strength as a major issue in antitrust.
AAI is considered by many as the most authoritative antitrust think tank
in the nation. In attendance were attorneys, scholars and antitrust regulators
at the state, federal and international level. Also, in an odd juxtaposition,
S. Robson Walton, the chairman of Wal-Mart, the biggest Power Buyer in
the world, presented to the group. At issue was the power of dominant
firms that have the incentive and the ability to cause economic harm to
suppliers in all sectors of the economy including health care,retail food,
agriculture, and professional sports.
Michael Stumo presented on buyer power in agriculture.
"We usually think of monopolies in antitrust law. A monopolist is
a powerful seller that raises prices wrongfully to harm consumers. But
farmers and ranchers generally deal with the mirror image ‘monopsony’
power," Stumo told attendees. "Agriculture’s monopsonists
are power buyers that may use their market or bargaining power to lower
prices or extract other concessions from suppliers such as agricultural
producers. Contrary to the views of the naïve-wing of the Chicago
School, buyer power does not correlate with consumer benefit.”
Stumo discussed the fact that the food and agricultural sectors of the
U.S. economy tend to produce more price-manipulation problems than any
other sector. He also pointed to the need for a regulatory system that
facilitates agricultural markets that are fair, accessible and competitive
as opposed to the current unfair, closed and anticompetitive markets that
producers are forced to market within today. "Agricultural markets
should be viewed as akin to the stock markets," commented Stumo.
“Without market facilitating rules, they break down into chaos,
lack of confidence, and market access problems.”
As recently as 1997 when the Organization for Competitive Markets, a client
of Domina Law Group, was formed the monopsony issue was foundering the
backwater of antitrust thought and practice. OCM and the American Antitrust
Institute have striven to bring attention to the fact that PowerBuyers
can harm people and the economy just as much as Power Sellers."
Stumo is recognized nationally as a leading authority on agricultural antitrust
and competition issues. He is an attorney with Domina Law Group, in Omaha,
NE, which focuses its practice in the area of complex litigation. He has
testifed before the US Congress several times, and is the author of a
number of widely distributed publications on antitrust and related legal topics.