AUSTIN – Though states have an important role to play in local antitrust enforcement, a new study released today by the Foundation, Protecting Innovation: The Role of State Attorneys General in Antitrust Enforcement by Bill Peacock and Josiah Neeley, finds that the increased role of state attorneys general in interstate and high-technology antitrust cases today is a costly intrusion into commercial activity that hinders competition.
“The recent increase in antitrust enforcement by state attorneys general has had negative consequences for competition and innovation,” said Bill Peacock, the Foundation’s Vice President of Research and Director of the Center for Economic Freedom. “This is particularly true in high-technology markets, where federal antitrust enforcement is already problematic.”
The paper 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 Josiah Neeley, a policy analyst and attorney in 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.”
Recommendations in this paper, which can be read in its entirety here, include, 1) states should focus on intrastate, i.e., local, business activity, 2) the ability of states to bring parens patriaesuits under federal antitrust laws should be eliminated, 3) Congress should work to eliminate other overlapping areas of federal and state antitrust jurisdiction, including state involvement in premerger review; and 4) states should more closely examine the actions of other states for possible consumer harm from restrictions on commerce.
Bill Peacock is the Vice President for Research and Director for the Center for Economic Freedom at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.
Josiah Neeley is a policy analyst for the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.
The Texas Public Policy Foundation is a non-profit free-market research institute based in Austin.