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Hollis Salzman and Meegan F. Hollywood at Robins, Kaplan, Miller & Ciresi L.L.P. in New York have written a timely Guest Post on an important and exotic antitrust topic — monopsony.

Ms. Salzman serves as Co-Chair of Robins Kaplan's Antitrust and Trade Regulation Group and as co-lead counsel in blockbuster antitrust class actions, including In re Automotive Parts and In re Air Cargo Shipping Services. Recognition of her knowledge and skill have come from Chambers USA, Lawdragon, and Benchmark Litigation, to name a few. Check out a recent interview by Law360.

Ms. Hollywood prosecutes class actions that involve price-fixing, unlawful monopolization, and other anticompetitive practices. She heads up the associates who handle In re Air Cargo Shipping Services.

You can contact them at and, respectively.

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"The Everything Store" — Can You Buy a Monsopsony on Amazon?

There has been a lot of buzz in recent months over the highly publicized Amazon-Hachette dispute, which was first reported by The New York Times when negotiations over renewed contract terms between the online retailer and publisher broke down earlier this year.  While details regarding the exact nature of the dispute have not been divulged, the general consensus is that Hachette prefers to return to an agency pricing model, which allows publishers to set the prices of their own books.  Amazon is adamantly opposed to this switch because the agency model would prevent the kind of drastic discounting that Amazon is known for.  It’s no secret that publishers deem Amazon’s discounting practices a violation of antitrust laws.  Recent debate, however, has focused on whether US regulators tend to agree.

Of course, all of this follows from that other much-publicized dispute in which the Department of Justice successfully claimed that the six largest publishers in the US, including Hachette, unlawfully colluded with Apple to raise e-book prices when they introduced the agency pricing model in response to Amazon’s deep discounting back in 2010.  The publishers settled the case and agreed to certain restrictions, which largely enabled Amazon to continue discounting e-books.  Moreover, US District Judge Denise Cote’s final order, issued in 2013, laid out a staggered schedule for the various publishers to renegotiate their contracts with retailers.  As it turns out, Hachette was up first.

Reportedly, Amazon demanded better terms from Hachette, and negotiations rapidly deteriorated.  Amazon retaliated by declaring literary war on Hachette in an effort to force the publisher’s hand.  Specifically, Amazon delayed delivery of books published by Hachette for up to three weeks, removed the pre-order option for Hachette titles, charged more for Hachette books, and even suggested that readers might enjoy a book from another author instead.  To add to the hype, Hachette authors simultaneously took to social media to denounce the mammoth online retailer for offenses ranging from bullying to extortion to a violation of antitrust laws.

Meanwhile, across the pond, recent reports indicate that the European Commission has begun a preliminary investigation into complaints that Amazon violated European competition law by engaging in similar tactics with Bonnier AB, a German publishing trade group.  Specifically, Bonnier claims that Amazon delayed delivery of its books in order to force the publisher to accept lower prices for its e-books.  European antitrust law expressly forbids companies with a dominant market position from engaging in such abusive conduct. 

All of this has led many to ponder whether Amazon’s recent exploits might (finally) raise the eyebrows of US antitrust watchdogs.

Monopoly, Monopsony – What’s The Difference? 

While commentators often attach the word “monopoly” to Amazon, the real inquiry is whether Amazon is, instead, a “monopsony.”  An unlawful monopsony, the lesser known violation in the antitrust family, occurs when a buyer of goods has the power to unlawfully lower the prices of the products that it buys.  By contrast, an unlawful monopoly occurs when a seller of goods has the power to unlawfully raise the prices of what it sells.  Both result in a misallocation of resources, which harms consumers and distorts markets, and therefore each violates antitrust law. 

The theory of monopsony assumes that the monopsonist has the power to dictate terms to its suppliers.  However, to show monopsony, one must show that suppliers are forced to sell their products at prices so low that the loss results in a reduction of supply.  Harm to the market results when suppliers are, in turn, driven out of business, or have less money to invest in new innovation, technology, equipment, and/or expansion.  In that sense, a monopsony often does not directly affect consumers in the traditional way that unlawful monopolies do. 

As an added wrinkle, buyer power without true monopsony power can actually benefit consumers.  Indeed, when buyer power pushes prices down without resulting supply reduction, consumers enjoy lower downstream prices.  Consumers are harmed, however, when output reduction is coupled with a misallocation of resources.  While consumers may not immediately feel the effects of the monopsony, harm resonates nonetheless as wealth is transferred to the monopsonist, and consumers are faced with higher prices and fewer options.

For its part, Amazon has a strong reputation for consumer-friendly discounting.  Thus, as consumers enjoy discounted e-book prices, it is difficult to imagine how they are being harmed by Amazon’s practices.  The relevant question is whether Amazon’s bullying tactics with publishers could effectively result in a reduction of books being published.       

Could Amazon Be The First Illegal Monopsony?

Significantly, no US court has yet to find a single company guilty of an unlawful monopsony.  The case that came the closest was Weyerhaeuser Co. v. Ross-Simmons Hardware Lumber Co., 549 U.S. 312 (2007).  In Weyerhaeuser, a dominant purchaser of logs was accused of overbidding, and driving its smaller rival out of business.  While the trial court and Ninth Circuit found for the plaintiffs, agreeing that the defendant paid “more than it needed to pay” for logs, the Supreme Court reversed 9-0.  

The Weyerhaeuser Court concluded that predatory buying must be evaluated under a much stricter analysis than that contemplated by the Ninth Circuit.  Specifically, the Court held that a buyer is liable only if (1) buy-side bidding caused costs to rise higher than revenues, and (2) the defendant has a “dangerous probability of recouping the losses” through an “exercise of monopsony power.”  It is important to note that under the Weyerhaeuser standard, recoupment via higher prices in the downstream market does not satisfy the test.  Rather, the Supreme Court required recoupment “through the exercise of monopsony power,” that is – by forcing lower prices on the buy-side.  

Since Amazon first introduced its Kindle product, it has priced e-books below what it was buying them for.  For example, if Amazon bought an e-book from Hachette for $15, it resold it to a consumer for $9.99, losing $5.01 per e-book.  Not surprisingly, e-book consumers flocked to Amazon helping the online retailer to grow exponentially over the years, and causing publishers and authors to rely on Amazon’s sales.  In fact, some have even suggested that consumers use Amazon as a modern-day card catalog.  According to that theory, if a book or author is not sold on Amazon, that book or author must not exist. 

With its low prices and established reputation as a consumer-friendly reading room of sorts, there is little debate that Amazon is a dominating force in the e-book market, both on the buy-side and sell-side.  Varied reports have placed Amazon’s share of the e-books market from anywhere between 60 to 90 percent.  Moreover, Amazon accounts for nearly 65 percent of Hachette’s e-book sales.  Thus, Amazon certainly has market power in the antitrust sense, and its buyer power alone cannot be said to be merely circumstantial. 

Now it seems that Amazon is attempting to enhance its bottom line by wielding its power in the market to achieve more favorable pricing from publishers, rather than by increasing its own prices downstream, i.e. recoupment through the exercise of monopsony power.  It remains to be seen, however, whether Amazon’s tactics will result in a reduction of output.  Publishers will certainly be put out by larger discounts to Amazon and expensive services.  Authors will likewise suffer if publishers are, in turn, unable to pay large advances, or are paid less per book due to higher discounts paid to Amazon.  Stifling authors could certainly lead to fewer publications for consumers to choose from, and a reallocation of wealth flowing directly to Amazon. 

Interestingly, in an effort to break its standoff with Hachette, Amazon executive David Naggar, wrote an open letter to Hachette authors proposing to take them out of the middle of the dispute by promising them a “big windfall.”  Specifically, Amazon dangled 100% of the sales price of every Hachette e-book sold on Amazon to Hachette authors.  However, Hachette quickly rejected the proposal, calling it “suicidal.”  Whether Amazon is trying to avoid being labeled an unlawful monopsonist by this recent proposal, or whether it is just trying to win back the hearts of frustrated authors and consumers alike remains to be seen.


The general consensus among antitrust analysts is that US regulators are not likely to intervene in what has been labeled by some as a simple business dispute.  Indeed, many view this dispute as normal business dealings between a retailer and supplier, and maintain that the enormous attention merely stems from the visibility and notoriety of the parties involved.  However, as Amazon continues its fight with Hachette, and its contracts with the remaining publishers start to expire, perhaps US regulators will be inclined to take a closer look.

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Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.