State Regulation in the Shadow of Antitrust: FTC v. Ticor Title Insurance Co.
Supreme Court Economic Review, Vol. 3, p. 189, 1993
49 Pages Posted: 11 Jun 2009
Date Written: June 9, 2009
In FTC v. Ticor Title Insurance, the Supreme Court denied antitrust immunity to insurers that had participated in state-sanctioned rate-setting activities. Applying the two-part Midcal test, the Court held for the first time that a state agency had failed to "actively supervise" private action under a clearly articulated state policy. In this 1993 article, we propose a theory of state action that accounts for the values that the Court invoked. Under this theory, federalism is a background norm that counsels a narrow interpretation of the Sherman Act to permit state regulation that is not a naked repeal of antitrust rules. Displacement of antitrust is immune if it is ancillary to a positive regulatory program in which state actors control discretion to harm consumers, e.g., by fixing prices.
Keywords: K21, K41, K43, L41, L51
Suggested Citation: Suggested Citation