Buyer power

Buyer power in the European Union Law

Concept of Buyer power provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Ability of one or more buyers, based on their economic importance on the market in question, to obtain favourable purchasing terms from their suppliers. Buyer power is an important aspect in competi-tion analysis, since powerful buyers may discipline the pricing policy of powerful sellers, thus creating a 'balance of powers' on the market concerned. However, buyer power does not necessarily have a positive effect. Where a strong buyer faces weak sellers, for example, the outcome can be worse than where the buyer is not powerful. The effects of a buyer's strength also depend on whether the buyer, in turn, has seller power in a downstream market.