Antitrust by Interior Means
Files
Description
If a firm is a nexus of contracts, then it is just the sum of its counterparties. It follows that when a firm monopolizes a particular market and exploits its power to impose unfavourable terms on a counterparty, the firm necessarily exploits one counterparty for the benefit of another, because the additional profits the firm generates from the unfavourable terms must be paid out eventually to some other counterparty of the firm. One alternative to attacking monopoly power through breakup of large firms or limits on anticompetitive conduct in the marketplace is therefore to prevent any one counterparty of the firm from so dominating firm governance as to be able to induce the firm to oppress other counterparties for its benefit. Creating a balance of power in firm governance, by giving each class of counterparties (i.e., workers, suppliers, investors, and consumers) an equal say over the choice of board members, would eliminate the internal forces that induce firms to exercise monopoly power. But it would not prevent firms from engaging in productive, pie-expanding, behaviour, because such behaviour tends to expand the business that the firm does with all of its counterparties—or at least enables the firm to use a share of the gains to compensate those counterparties that lose out and therefore benefits them all.
Publication Date
2023
Book Title
Intersections Between Corporate and Antitrust Law
Book Author/Editor
Marco Corradi & Julian Nowang
Publisher
Cambridge University Press
City
Cambridge
ISBN
9781108899956
DOI
https://doi.org/10.1017/9781108899956.011
Keywords
corporate law, antitrust, shareholder primacy, consumer welfare, corporate governance, monopoly, suppliers, workers, wealth distribution, inequality, competion
Disciplines
Antitrust and Trade Regulation | Business Organizations Law | Law
Recommended Citation
Woodcock, Ramsi A., "Antitrust by Interior Means" (2023). Law Faculty Books and Chapters. 67.
https://uknowledge.uky.edu/lawfac_book/67
Notes
Woodcock, Ramsi A. “Antitrust by Interior Means” in Intersections Between Corporate and Antitrust Law. Cambridge: Cambridge University Press, 2023.