Posted by Social Science Research Network
NC Dental Antitrust Professors Amicus Brief – Rebecca Haw (Vanderbilt University School of Law), Einer Elhauge (Harvard Law School) and Aaron S. Edlin (University of California at Berkeley; National Bureau of Economic Research)
ABSTRACT: Petitioner advocates a radical change in this Court’s precedent on antitrust state action immunity, which has consistently held that financially-interested market participants must be treated as private actors, regardless of whether the state makes them a state agency. Under Petitioner’s logic, a state instead can, by the simple expedient of calling market actors a state agency and giving them authority to enforce their cartel, immunize that private cartel and effectively repeal the operation of federal antitrust law. This sort of inverse preemption of federal antitrust law by states has never been permitted by this Court. Petitioner mischaracterizes the cases it claims support its position, which in fact have never given state action immunity to financially-interested market participants unless they are actively supervised by disinterested government actors, and ignores or mischaracterizes other cases that plainly hold the contrary.
In recent decades, the states have created a host of new licensing boards made up of market participants with strong incentives to restrain trade. See Aaron Edlin & Rebecca Haw, Cartels By Another Name: Should Licensed Occupations Face Antitrust Scrutiny? 162 U. Penn. L. Rev. 1093 (2014). Occupational licensing, once limited to a few licensed professions, is widespread and growing — from 5% of the U.S. workforce in the 1950s, to 15% in the 1970s, to 30% today. Occupational licensing has been abused by incumbent market participants to exclude rivals, often in unreasonable ways, and to raise prices. This disturbing trend already costs consumers billions of dollars every year and impedes job growth, and the trend would get much worse if the Court were to accept Petitioner’s argument and hold that financially-interested market participants enjoy antitrust immunity whenever the state empowers them as a state agency.
Even if the North Carolina board members were not themselves financially-interested market participants, the fact that they were all elected to their positions by financially-interested market participants should suffice to treat the board as private. After all, if a private cartel paid an employee a flat salary to fix prices for it, the fixed prices would predictably reflect the cartel’s financial interests even though the employee was not a market participant and had no direct financial interest in the prices set. Thus, election by financially-interested market participants should always be treated as sufficient to treat a board as private, although such election is not necessary for such treatment when (as here) the board members are themselves financially-interested market participants. Sufficiency, should not, however be confused with necessity. Because state boards dominated by financially-interested market participants are almost always appointed, if the Court changed current law to make election by market participants necessary to lose immunity, it would leave the foxes to guard the henhouse for a large fraction of the workforce.
Featured News
Redfin Settles $9.2M Commission Inflation Lawsuits
May 7, 2024 by
CPI
DOJ Supports Colorado’s Efforts to Block Kroger-Albertsons Merger
May 7, 2024 by
CPI
Japan Considers Regulation of AI Developers
May 7, 2024 by
CPI
European Commission Extends Decision Deadline for Ita-Lufthansa Merger
May 7, 2024 by
CPI
UK, US and Australia Sanction Senior Leader of LockBit Cybercrime Gang
May 7, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI