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Federalism in Antitrust

47 Pages Posted: 4 Oct 2005  

Robert W. Hahn

University of Oxford, Smith School; Georgetown University

Anne Layne-Farrar

Charles River Associates; Northwestern University

Date Written: September 2002


Several scholars have suggested that states should play a much more limited role in antitrust enforcement, especially in matters that are national or global in scope. In this paper, we analyze the states' part in the Microsoft case - a case that illustrates the costs of state intervention in antitrust matters that extend beyond state borders. Here, the states' involvement lengthened the lawsuit, complicated the settlement process, and increased both legal uncertainty and litigation costs. These results followed from the states' focus on parochial interests rather than broader concerns for efficiency and equity. We conclude that a state's antitrust enforcement authority should be restricted in matters that extend beyond its borders.

After analyzing the motivations for state behavior in federal antitrust, we consider whether restrictions should apply to federal antitrust authorities in cases with international implications. Though a global competition authority could, in principle, be designed to maximize economic well-being, practical and political obstacles appear to rule this option out, at least in the short term.

Keywords: antitrust, federalism, states, enforcement

JEL Classification: L40

Suggested Citation

Hahn, Robert W. and Layne-Farrar, Anne, Federalism in Antitrust (September 2002). AEI-Brookings Joint Center Working Paper No. 02-09. Available at SSRN: or

Robert W. Hahn (Contact Author)

University of Oxford, Smith School ( email )

United Kingdom

Georgetown University

Georgetown Center for Business and Public Policy
Washington, DC 20057
United States

Anne Layne-Farrar

Charles River Associates ( email )

1 South Wacker Drive
Suite 3400
Chicago, IL 60606
United States
312-377-9238 (Phone)


Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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