Study examines role of state attorneys general in antitrust enforcement

By Jessica M. Karmasek | Jan 29, 2013

AUSTIN, Texas (Legal Newsline) -- A study released this month by a Texas-based nonprofit finds that the increased role of state attorneys general in interstate and high-technology antitrust cases is a "costly intrusion into commercial activity that hinders competition."

Still, the nonprofit free-market research institute Texas Public Policy Foundation, located in Austin, noted in its study that states have an important role to play in local antitrust enforcement.

The study, "Protecting Innovation: The Role of State Attorneys General in Antitrust Enforcement," was released Jan. 18. It was written by Bill Peacock and Josiah Neeley.

Peacock is the Vice President for Research and Director for the Center for Economic Freedom at the TPPF.

Neeley is a policy analyst for the Armstrong Center for Energy and the Environment at the foundation.

"The recent increase in antitrust enforcement by state attorneys general has had negative consequences for competition and innovation," Peacock said in a statement. "This is particularly true in high-technology markets, where federal antitrust enforcement is already problematic."

The foundation's study finds that the increase in antitrust enforcement by state attorneys general in recent years raises several concerns, including: the potential of geographic bias that comes from state attorneys general protecting locally-based businesses from competition; the potential for increased litigation and harsher penalties; and the duplicative nature of dual state and federal antitrust enforcement.

"While we see a clear role for the states in enforcing antitrust law in local commerce, it is much more difficult to discern a role for the states in transactions that are in many cases not only national, but international," said Neeley, who is also an attorney for the foundation's Center for Tenth Amendment Studies.

"The complexity and rapid innovation of high-tech markets increase the possibility of harmful outcomes from antitrust enforcement, and these challenges are intensified by involvement at the state level."

The foundation's 24-page paper recommends the following:

- States should focus on inĀ­trastate, i.e. local, business activity;

- The ability of states to bring parens patriae suits under federal antitrust laws should be eliminated;

- Congress should work to eliminate other overlapping areas of federal and state antitrust jurisdiction, including state involvement in pre-merger review; and

- States should more closely examine the actions of other states for possible consumer harm from restrictions on commerce.

To view a PDF of the complete study, click here.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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