Working Paper No. 12-76:
U.S. Convergence with International Competition Norms: Antitrust Law and Public Restraints on Competition

Author(s):

James L. Cooper

Date Posted: November 2012

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Abstract:

In this Article we focus upon an area in which greater convergence of U.S. policy with the practice of many foreign countries is long overdue: the treatment of public policies that suppress competition.  Whereas the European Union (“EU”) and numerous other jurisdictions have taken strong measures to limit restraints imposed by national government authorities and political subdivisions, U.S. antitrust policy in many ways is more tolerant of public restraints upon business rivalry.  Since the early twentieth century, Supreme Court doctrines have evolved to grant states and the federal government broad rights to enact laws that restrain competition.  Further, individual groups are largely free to lobby for laws designed to erect marketplace barriers, and in many cases to mire their competitors in a morass of governmental processes. Because government action (and private conduct to obtain such action) is challengeable in only relative narrow circumstances, much of the battle takes place in the legislative and regulatory arenas rather than in courts.  Accordingly, advocacy is the primary tool available to both public and private enforcers of the U.S. antitrust laws to challenge state-imposed restraints on competition. Although the U.S. competition advocacy program has achieved important success, it is not enough.  United States enforcers should stand on equal footing with their EU and other foreign counterparts in being able to challenge state action that threatens competition in the same manner as they can challenge private conduct.  In this paper, we describe measures available to competition authorities in the U.S. and other jurisdictions to resist encroachments by government policies on the competitive process.  We suggest approaches by which the framework of controls upon anticompetitive government policies could be strengthened in the United States.