Superior Bargaining power: Dealing with aggregate concentration concerns

Abstract

Aggregate concentration has recently been recognized as an important source of competitive constraints. The concerns raised by it are, however, particularly difficult to deal with, largely because they do not lend themselves to straightforward solutions. This chapter examines the use of abuse of superior bargaining position provisions to remedy aggregate concentration concerns. Special focus is placed on Japan and South Korea, both of which have attempted to use such provisions to counteract the inherent advantage in bargaining power enjoyed by large conglomerates vis-à-vis smaller or weaker trading counterparts. This experience is interesting, inter alia, because in recent years Japan has shied away from using superior bargaining power prohibitions to deal with aggregate concentration, while South Korea has taken a different stance. The chapter suggests that abuse of superior bargaining position provisions can, at best, be a second-best solution to address aggregate concentration concerns. Nonetheless, they can be used to curb conglomerate abuse of their economic power under some circumstances. It concludes by suggesting that some modifications can be made to these provisions to render them more suitable for this purpose.