Are the Worst Kinds of Monopolies Immune from Antitrust Law?: FTC v. North Carolina Board of Dental Examiners and the State-Action Exemption
“You can get more with a kind word and a gun than with just a kind word,” in the apocryphal words of Al Capone. Adam Smith, for his part, really did say that businessmen love to collude. Put the two together and you get the deep truth that businessmen’s collusion is all the more effective—with no need to worry about pesky maverick competitors or cartel cheaters—when it’s enforced, in the last resort, by the guns of the state.
There is much to criticize about federal antitrust law, but one would think that at least state-sanctioned cartels present the problem of monopoly in particularly naked form—and that perhaps antitrust law might be of some help in this circumstance. One might think so, but one would generally be wrong: ever since Parker v. Brown in 1943, the Supreme Court has read a “state action” exemption into federal antitrust law. The most naked anticompetitive restraints—when an industry is cartelized by the direct mandate of the state legislature—now also provide the most immunity.
