Introduction:

America is facing a crisis of corporate concentration.[1] In the U.S., 75% of industries are now controlled by a smaller number of large corporations than they were just 20 years ago.[2] The extreme power of dominant corporations is evident in major sectors of our economy, from technology platforms to telecommunications, banks, health care, retail, airlines, and more. Even in niche sectors like contact lenses, cat food, mattresses, and meat, a few powerful corporations dominate the market.[3] Corporate concentration has depressed wages for working people, threatened the supply of critical goods, undermined small businesses, and jeopardized the well-being of entire communities.[4]

As long as there have been dominant corporations in America, so too have state governments led the way to promote innovation and fair competition, protect workers from abusive working conditions, and prevent illegal price fixing. Prior to the adoption of the first major federal antitrust law in the United States, the Sherman Act of 1890, at least 13 states had already adopted antitrust statutes. An additional 14 states and territories had adopted constitutional prohibitions on monopolies or other anti-competitive business forms.[5] The federal adoption of the Robinson-Patman Act in 1936 (protecting small businesses from discriminatory pricing) was preceded by a flurry of state legislative action to do the same.[6] Throughout the history of antitrust law, it was envisioned that federal law would supplement — not replace — the enforcement of established state rules. Time and time again, a groundswell of local support led state policymakers to take action, which in turn laid the groundwork for federal actors to follow.

State actors have also played a critical role in enforcing both federal and state antitrust laws. Armed with new powers and funding conferred upon them by the Hart-Scott-Rodino Act in 1976, an alliance emerged among state attorneys general to enforce antitrust laws.[7] During the subsequent Reagan era of unprecedented federal nonenforcement, state AGs reasserted themselves as enforcers of both federal and state antitrust laws, focusing in particular on challenging mergers and vertical restraints.[8] State regulators and enforcers became the focal point for protecting small businesses and consumers from the abusive practices of large corporations.

Reinvigorating antitrust law is fundamental to our democracy.[9] Instead of competing for relevance in the marketplace, dominant corporations now spend their dollars in the political arena in order to purchase rules that rig markets in their favor and allow them to extract resources from local communities. Lobbying expenditures are at all-time highs,[10] industry groups have used corporate-friendly courts to reshape labor laws,[11] and digital advertising monopolies have decimated newspapers, magazines, and other information outlets.[12]

Nearly 50 years after the last major changes to federal antitrust law, and in the wake of decades of lax and ineffective enforcement — aided by a series of legal opinions making it more difficult to bring cases in the first place — states can take the lessons we’ve learned and translate them into action. Decentralizing economic power is a key part of the effort to redistribute power in our society, tackle historic levels of wealth inequality, and create an inclusive, robust democracy.[13] State governments and enforcers have the power — and the historical record — to work together and explore new models for protecting workers, consumers, and small businesses across the country.

This guide for state lawmakers sets forth a number of policy proposals that will have immediate, tangible impacts. They are informed by observed real-world harms, best practices gleaned from various stakeholders, and recognized gaps in federal antitrust law — and they are designed to reinvigorate a national conversation about how best to confront the crisis of corporate concentration.

Notes:

[1] “Confronting America’s Concentration Crisis: A Ledger of Harms and Framework for Advancing Economic Liberty for All,” American Economic Liberties Project, July 2020.

[2] White House 2021 Executive Order on Promoting Competition in the American Economy.

[3] “Confronting America’s Concentration Crisis,” supra note 2.

[4] Id.

[5] Gavil, Andrew I., “Reconstructing the Jurisdictional Foundation of Antitrust Federalism.” 61 Geo. Wash. L. Rev. 658, March 1993.

[6] Id.

[7] Kovacic, William E. “Article: Reagan’s Judicial Appointees and Antitrust in the 1990s.” 60 Fordham L. Rev. 49, 1991. See also Flexner, Donald L. and Racanelli, Mark A., “Merger Control and State Aids Panel: State and Federal Enforcement in the United States: Collision or Harmony?” 9 Conn. J. Int’l L. 501, 1994.

[8] Id.

[9] “Confronting America’s Concentration Crisis,” supra note 2.

[10] “Amazon Breaks Lobbying Record Amid Antitrust Fight.” Bloomberg, July 2022.

[11] Epstein, Lee; Landes, William M.; and Posner, Richard A. “How Business Fares in the Supreme Court.” Minnesota Law Review, 2013.

[12] “The Expanding News Desert.” UNC Hussman School of Journalism and Media, 2018.

[13] “Confronting America’s Concentration Crisis,” supra note 2.