Ban Restrictive Covenants That Chains Use To Prevent Competition
Local and state governments can ban restrictive covenants for grocery and pharmacy chains, helping improve access to essential goods and services.
For more than a century, people in the U.S. harmed by monopolies and cartels have had the power to enforce antitrust law by suing to stop anticompetitive practices and recover what they’ve lost — called a private right of action. That right is no accident; Congress and dozens of state lawmakers gave workers, shoppers, and honest businesses the right to sue under the antitrust laws to recover damages and deter corporate wrongdoing. But today, big businesses and their supporters are mounting a concerted attack on antitrust’s private right of action. State and federal lawmakers and enforcers should take action to strengthen and grow this right.
Ensuring shoppers, workers, and small businesses have the right to sue when they’ve suffered damages at the hands of monopolies or cartels is a cornerstone of antitrust enforcement. Nearly every federal antitrust law in the U.S. includes the right of private parties injured by anticompetitive conduct to sue, both to stop the harmful behavior and to recover damages lost due to price fixing, monopoly abuses, or other harmful actions. The country’s primary federal antitrust laws, the Sherman Act of 1890 and the Clayton Act of 1914, contain clauses that create and protect a private right of action. The Sherman Act, our original federal antitrust law, allows those harmed by monopolies to sue for three times the amount of damages they suffered. The Clayton Act restates that right and gives private parties the power to challenge anticompetitive conduct through court-ordered injunctions. Nearly every state-level antitrust law also allows customers, competitors, and others harmed by anticompetitive acts to sue for both injunctions and damages.
For decades, courts generally accepted the laws’ creation of “private attorneys general” as an important, often necessary, prong of American antitrust enforcement. The Supreme Court repeatedly found that Congress’ inclusion of a private right of action, and the role of private attorneys general in enforcement, helped further antitrust’s overall goals by compensating those harmed by monopoly tactics and deterring anticompetitive actions. As the Court made clear in Reiter v. Sonotone Corp., “Congress created the treble-damages remedy of [the antitrust laws] precisely for the purpose of encouraging private challenges to antitrust violations. These private suits provide a significant supplement to the limited resources available to the Department of Justice for enforcing the antitrust laws and deterring violations.” Private treble damages and injunctive remedies were not merely to provide private relief, the Court wrote in another case, but were “to serve as well the high purpose of enforcing the antitrust laws.” Similarly, some federal antitrust enforcers have shown their support for private litigants by filing statements of interest and amicus briefs in private antitrust cases, emphasizing the important role private lawsuits play in enforcing and shaping antitrust law.
The need to empower private attorneys general to enforce antitrust law has become increasingly evident. Antitrust enforcement under the Trump administration has slowed significantly amid widespread staff reductions and leadership turmoil. The decline in federal antitrust enforcement comes as concerns about how market concentration affects wages, prices, and the integrity of our political system reach new heights. While state-level government enforcement has done an admirable job continuing to pursue major antitrust cases and investigations abandoned by their federal counterparts, state antitrust enforcement resources are extremely limited.
Enforcement statistics show both the limited resources of government enforcement and the importance of private attorneys general in antitrust enforcement. Private antitrust enforcement traditionally made up over 90 percent of all federal antitrust cases between 1975 and 2004. Federal enforcement’s reliance on private litigants is becoming even more pronounced today; private plaintiffs filed 772 of the 787 new federal antitrust lawsuits in 2025, or around 98 percent, according to federal court statistics. Without a private right of action, monopolists and cartelists would face very little enforcement and would have little reason to stop their wrongdoing.
Vigorous private enforcement of antitrust laws has traditionally worked in tandem with sustained public enforcement to create a competitive, decentralized economy. A 2008 study of 40 antitrust cases found that private plaintiffs recovered more than four times as much in damages as what federal prosecutors issued in fines when prosecuting all anticompetitive conduct over the same time period.
The success of private antitrust enforcement in recovering damages and curbing illegal conduct outside government action spurred aggressive backlash from corporate interests and their proxies. The attacks on private enforcement (and antitrust enforcement overall) over the past four decades have resulted in a series of Supreme Court decisions greatly restricting pleading standards and the scope of federal civil claims, including antitrust monopolization claims. The Supreme Court’s 2007 decision in Bell Atlantic Corp. v. Twombly — and Ashcroft v. Iqbal two years later — made it far more difficult for plaintiffs to survive a motion to dismiss and reach the discovery stage of a case, where the details of a conspiracy or a monopoly claim are often revealed. They also continued a series of judicial decisions that, in practice, amended democratically approved federal law through judicial interpretation in ways that restricted victims’ access to justice.
These restrictions on private antitrust cases happened amid concerted attacks on private enforcement. For decades, the Chamber of Commerce and others have pushed a false narrative that the private right of action leads to frivolous and excessive litigation, driven largely by “ambulance chaser” plaintiff attorneys. “The U.S. system of private antitrust remedies, including automatic punitive (treble) damages, gives plaintiffs’ lawyers overwhelming incentives to bring weak cases and pressures defendants to settle them,” lawyers for the Chamber wrote in a 2021 policy brief.
This false narrative has pushed lawmakers to strip the private right of action from laws where private enforcement is necessary to effectively stop corporate wrongdoing. In California, lawmakers passed a new illegal monopolization law called the COMPETE Act but removed the ability for workers, businesses, and shoppers to sue monopolists, drastically reducing the likelihood that the law will actually be enforced or that those harmed by illegal conduct can recover what they’ve lost. This has also occurred on economic issues beyond antitrust; Michigan lawmakers stripped the private right of action from their 2025 minimum wage and paid sick leave law, leaving workers unable to sue their employers when those companies don’t abide by the new rules.
The reality around antitrust cases undermine this false narrative about frivolous litigation. Violations are difficult to detect and building a case that can survive motions is typically expensive, and fact-intensive, which is likely why private plaintiffs filed just 787 antitrust cases last year. A study by antitrust scholars Robert Lande and Joshua Davis also shows that between 2008 and 2015, private antitrust cases accounted for fewer than one percent of all federal civil cases annually.
When private antitrust cases do reach a jury, producers and smaller competitors have recovered millions in damages from monopolies and cartelists. Farmers have been particularly successful in recovering damages from the myriad companies that dominate and fix prices in their industry. In 2021, a class of peanut farmers secured $103 million in damages from the two companies that collectively monopolize peanut processing in America. A dozen dairy farmers in the southwest secured nearly $35 million from two dominant dairy cooperatives, the Dairy Farmers of America and Select Milk Producers, that allegedly conspired to underpay farmers for the milk they produce.
The pharmaceutical drug industry provides another clear example of how private action can help consumers and businesses recover damages. Regeneron Pharmaceuticals won more than $400 million in damages after a jury found that Amgen unlawfully monopolized a cholesterol drug. Another jury awarded a class of patients, insurers, and drug store owners $885 million in damages against drug companies involved in a pay-for-delay scheme. Those are just two examples, of many. These results, and many others, demonstrate the merit of private cases and the important results they can deliver for American businesses and consumers.
Under U.S. antitrust law, private plaintiffs can also win court-enforced injunctions to stop monopolists from continuing anticompetitive behavior. While injunctions are tailored to remedy the monopoly tactics that harmed the specific plaintiff, they can also foster competition and open markets for other companies similarly harmed by the conduct. For example, when Epic Games sued both Google and Apple for monopolizing payments in their respective app stores, it was to prevent those companies from processing payments — and charging significant fees — for payments that should have been made directly to Epic. The injunctions Epic won freed it to take payments without interference from Google and Apple, but they also allowed every other app developer to take payments without going through Big Tech monopoly middlemen.
Federal and state lawmakers and enforcers should take steps to defend the private right of action and the results it delivers for shoppers, workers, and honest businesses. While protecting the private right of action should extend to other crucial areas of civil law, including consumer protection, labor law, and civil rights, the following proposed reforms focus primarily on private antitrust claims.
The U.S. Department of Justice and the Federal Trade Commission should follow some of their predecessors and use their authority to file amicus briefs and use their important advocacy voices to support private plaintiffs bringing antitrust claims in federal court. These efforts would make clear to appeals court judges considering private litigation that the private right of action is a crucial element of antitrust law enforcement.
Congress should consider introducing legislation that would reverse the far higher pleading standards introduced in the Supreme Court’s Twombly decision. Pleading standards, contained in the Federal Rules of Civil Procedure, describe what a plaintiff must show for a judge to allow a case to survive a motion to dismiss and proceed to discovery. A prior attempt to reverse Twombly through legislation, the Notice Pleading Restoration Act of 2010, was a promising attempt to address Twombly’s barriers to bringing private civil lawsuits, including antitrust cases. Any federal lawmaker attempting to undo the harms of Twombly must reconcile the differences in priorities in pleading standards among various areas of civil law. But finding a pathway to restore pre-Twombly pleading standards in antitrust, including the notice pleading standard the Supreme Court created in Conley v. Gibson, should be a policy priority.
Forced arbitration clauses, which corporations bury in mandatory terms of service and other contracts, strip consumers, workers, and trading partners of the right to sue, forcing those harmed by antitrust into arbitration rather than the courtroom. As former FTC Chair Lina Khan and litigator Deepak Gupta wrote in 2017, the Supreme Court’s increasing acceptance of forced arbitration clauses in standard contracts means “Arbitrators could now rule on actual statutory law — civil rights, labor protections, as well as antitrust — despite being unaccountable to the public.” By undermining the private right of action, forced arbitration acts as a transfer of wealth from aggrieved workers, shoppers, and businesses to corporate monopolists and other powerful corporations.
In the face of multiple pro-arbitration Supreme Court rulings that undermine Congressional intent of antitrust and other laws, Congress should make clear that arbitration cannot replace a private right of action, including class actions. For example, the “Forced Arbitration Injustice Repeal Act,” last introduced in 2025 by Sen. Richard Blumenthal and Rep. Hank Johnson, would render pre-dispute arbitration clauses in contracts unenforceable for antitrust disputes, as well as for employment, consumer, and civil rights claims. That act passed the House but did not advance in the Senate. Congress should reintroduce and advance that bill, or a similar bill, to ensure forced arbitration doesn’t interfere with antitrust’s private right of action.
Big business interests like the Chamber of Commerce push the false narrative that private antitrust enforcement creates frivolous litigation or raises costs, and have frightened state lawmakers into stripping the private right of action out of new consumer, worker, and small business legislation, including antitrust bills. Amendments that strip the private right of action make otherwise powerful bills largely unenforceable, subjecting public enforcement to politicking and political spending as powerful businesses try to curtail law enforcement altogether.
State lawmakers should buck this trend by preserving the right of private plaintiffs to enforce pro-consumer, pro-worker, and pro-independent business legislation they introduce or are considering. And governors should insist on signing such legislation only if it includes a private right of action.
After the Court ruled in Illinois Brick that consumers cannot sue to recover damages from cartels and monopolies, more than two dozen states passed laws expressly allowing those at every level of the supply chain to recover antitrust damages. Today, at least 29 states and jurisdictions have overturned the Court’s holding in Illinois Brick, allowing those indirectly harmed by anticompetitive behavior to be made whole through private lawsuits.
Lawmakers in states without so-called “Illinois Brick repealer” laws should draft and introduce legislation to ensure that consumers and others harmed by anticompetitive schemes and monopoly abuse can adequately recover damages in court.
Ron Knox, “The State(s) of Antitrust,” ILSR, 2025.
Ron Knox, “Live Nation and the Return of State Enforcement,” The Sling, 2026.
Ron Knox, “Empower State Attorneys General to Strengthen Antitrust,” ILSR, 2025.
Robert H. Lande and Joshua P. Davis, “Restoring the Legitimacy of Private Antitrust Enforcement,” A Report to the 45th President of the United States, American Antitrust Institute, 2017.
Joshua Civin and Debo P. Adegbile, “Restoring Access to Justice: The Impact of Iqbal and Twombly on Federal Civil Rights Litigation,” American Constitution Society for Law and Policy issue brief, Sep 2010.
Deepak Gupta and Lina Khan, “Arbitration as Wealth Transfer,” Yale Law & Policy Review, 2017.
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