Antitrust and the Supremacy Clause

57 Pages Posted: 1 Jun 2006  

Richard Squire

Fordham University School of Law

Abstract

In the course of damning the market giant Standard Oil, the Supreme Court declared that the purpose of the Sherman Antitrust Act is to prevent monopoly and the acts which produce the same result as monopoly. The Constitution's Supremacy Clause, in turn, requires preemption - that is, non-enforcement - of state laws that conflict with a federal statute. Put together, these propositions suggest that state laws which create monopolies should be prime candidates for preemption via the Sherman Act. But despite the syllogistic logic bearing down on them, monopoly-creating state laws have easily weathered most federal antitrust challenges, even when the state does not regulate the price the monopolist charges. The reason is that the Supreme Court's antitrust decisions on state economic regulation have consistently confused two distinct questions: whether market conduct encouraged by state law violates the Sherman Act, and whether state law conflicts with the Sherman Act and thus is preempted. This confusion explains other problems in the Court's antitrust jurisprudence, including the Court's inability to make sense of antitrust claims against municipalities acting as lawmakers rather than market participants. In this Article, I describe the sources and consequences of the Court's confusion, and then I propose how to resolve it.

Keywords: antitrust, Sherman Act, preemption, Supremacy Clause, Parker, state action immunity

JEL Classification: K21, H77, L40, L43

Suggested Citation

Squire, Richard, Antitrust and the Supremacy Clause. Stanford Law Review, Vol. 59, No. 1, p. 77, 2006. Available at SSRN: https://ssrn.com/abstract=905294

Richard C. Squire (Contact Author)

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States
212-964-1584 (Phone)

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