Agreements among competitors to negotiate prices are challenged by antitrust authorities as per se illegal. Implicitly competition policy assigns negligible probability to such arrangements to yield net social benefits. This statement implies that countervailing power - related to the collective action of competitors in order to counteract the market power of a supplier or consumer - has a secondary role on competition policy. This paper argues that under particular conditions agreements among competitors in order to negotiate prices may increase social welfare. As a consequence, this type of arrangement should not be charged as per se illegal, inasmuch as they may create countervailing power and mitigate the effects of pre-existent market power. The analysis suggests that economic theory should be more intensely used in antitrust analysis, mainly when there are conflicting results with the established court decisions.
Countervailing power; competition policy; agreements among competitors
