Market Power, Economic Dependence, or Bargaining Power: Why Do Titans Still Enjoy Protection in Several Member States?

Abstract

The paper addresses a long-standing discussion on what are the major sources of power asymmetry among the suppliers and the buyers in the agri-food chain, and thus, a primary cause of pursuing various kinds of so-called unfair trading practices. Basically, three theoretical frameworks stay beyond combating against these practices: market power, economic dependence, and bargaining power approach. The setting of personal scope in the new EU Directive 2019/633 profoundly prefers the lastly mentioned theoretical framework. But does such a preference signify the true triumph of the bargaining power conception? The paper intends to scrutinize it using an evaluation of the major traits of the frameworks, stressing that some of them may allow for the protection of those entrepreneurs who are not in need of it. The analysis of the ways how the Directive has been implemented in the Member States then indicates that such giant suppliers continuously enjoy protection in several countries. A special attention is devoted to Czech legislation whose development may serve as a kind of a natural experiment of how these competing conceptions function in the practice.

Keywords

• bargaining power
• market power
• economic dependence
• supplier and buyer
• buyer power
• agri-food chain