Empowered by our federalist system, states can and often do play a crucial role in antitrust leadership and enforcement. Leaders at the state level are better attuned to the needs of small businesses, workers, and communities within their state and are best positioned to take swift action when corporate abuses occur.
In particular, state attorneys general (AGs) are crucial to the leadership role that states play in enforcing strong antitrust policy. They can investigate corporations for abusing their market power. They can also pursue harmful actions and corporate mergers, and even sue to break up monopolies.
With federal antitrust enforcement at a crossroads, it is more important than ever that attorneys general have the necessary tools and resources to perform their critical job. The following policy recommendations will help ensure that state enforcers can utilize their authority under state and federal law to ensure open markets for small businesses, fair wages and conditions for workers, and safeguard consumers and communities from corporate dominance.
State AGs have the power to go after anticompetitive conduct and even ask courts to break up monopolies that harm residents and competition in their state, using both state and federal antitrust laws. States can also use their powers in court to win a myriad of concessions from corporations that break antitrust laws. And they can recover damages suffered on behalf of their residents — a power their federal counterparts don’t have.
State enforcers can also band together to carry out broad investigations of monopolies nationwide. This has been crucial work, historically and today. When the federal Justice Department chose to settle its monopoly case against Microsoft in the early 2000s, some state enforcers continued to prosecute the case, helping to expand access to tech markets to new, innovative companies. And today, dozens of state AGs are using their enforcement powers to challenge the abuses of Amazon, Apple, Google, and Facebook. For example, Arizona, California, and the District of Columbia all sued Amazon over its monopoly abuses months before the Federal Trade Commission took action against the company.
State attorneys general have also used antitrust laws to protect the rights of workers. More than a dozen states joined forces to investigate fast-food chains, including Arby’s and Dunkin’ Donuts, for imposing no-poach contracts on their low-wage employees. These clauses prevented workers from quitting their jobs to work for a rival chain. The states have thus far stopped four of the franchisors from using no-poach contracts and continue to investigate others.
Historically and currently, a core role of the states in antitrust enforcement has been to take action to stop harmful mergers. Under federal and some state antitrust laws, state attorneys general can sue to block a merger if they believe it will undermine competition to the detriment of producers, workers, or consumers. Over the past 40 years, they’ve done so — sometimes alongside the federal antitrust agencies and sometimes on their own. While some state-level merger challenges have involved broad, multi-state coalitions, most have entailed one or two state attorneys general stepping in to protect competition.
Evidence of states’ importance in merger cases is abundant. In Washington, the state’s attorney general sued in state court to block a proposed merger between grocery giants Kroger and Albertsons, a merger that would have left some Washington communities with just one grocery store. The state took the merger to trial and convinced a judge to block the deal. After losing in Washington (as well as against the FTC in a separate trial), the companies abandoned the merger, preserving important competition in the industry. And in Colorado, the attorney general moved to alter a healthcare merger that would have stopped local Medicare patients from accessing doctors — a concern the federal antitrust agencies at the time did nothing to address in their review of the deal.
State attorneys general should use their research and investigative powers to examine the market structure of key industries in their states and monitor and publicly report data on concentration levels by sector. This would help officials identify areas that require further investigation or warrant policy or enforcement intervention. It would also help inform the public, support research scholarship, and foster more local media coverage of concentration issues.
State AGs should actively engage the public on antitrust issues by hosting listening sessions and town halls to hear directly from workers, small businesses, and consumers affected by corporate abuses.
These listening sessions have helped guide state enforcers when deciding when and why to take on monopoly abuses and bad mergers. In Arizona, Attorney General Kris Mayes traveled across the state and heard from shoppers and workers worried about how the since-defeated Kroger-Albertsons merger might raise their prices and lower their paychecks. Colorado AG Phil Weiser did the same in his state. In Michigan, Attorney General Dana Nessel toured the state to hear from residents who are being squeezed by the state’s utility monopolies. The proximity of state enforcers to and their understanding of the real-world corporate abuses their residents face are crucial to guiding enforcement actions that promote fairness and equity.
Ron Knox“States have a strong history as frontline defenders of their citizens against the threat of powerful corporations.”
State AG budgets have remained unchanged over the long term. If states are to take on more — and more complex — antimonopoly work, those budgets must increase. State officials and activists should push for more funding for antitrust lawyers, investigators, and economists to help study and prosecute mergers and monopoly.
Increasing resources would not only allow state attorneys general to take action independently, but it would also expand the capacity of states to act collectively in bringing cases against exceptionally large and powerful companies, such as Amazon and Google. While state enforcement has been crucial to policing competition and protecting consumers, the majority of work is led by a few states with more extensive antitrust resources — California, New York, Colorado, and a handful of others. Meanwhile, many state AG offices employ just a few lawyers overall, let alone any specializing in antitrust.
Several states have recently enacted important, targeted antimonopoly reforms, providing enforcers with enhanced tools to address anticompetitive conduct. For example, in Minnesota, lawmakers approved new restrictions on hospital mergers that threaten to cut off healthcare access to residents. Three states — New York, California, and Minnesota — have passed “right to repair” laws that break the monopoly that massive electronics firms like Apple held over repairing their devices. Colorado and Washington have both passed laws that greatly increased the fines companies face for breaking the law.
States are also looking at broader legislation that would reinstate the principles and legal standards crucial to robust antitrust enforcement. New York’s 21st Century Antitrust Act, for example, has served as a lodestar for monopoly reform bills that both clearly define what constitutes market dominance and detail which kinds of corporate conduct are anticompetitive and violate the law.
For more details on how to strengthen state antitrust laws, see ILSR’s State Antitrust Resource Hub.
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In this ILSR event, two State AGs and other changemakers have a lively discussion about how states can advance the goals of the antitrust movement.
A bill in the Rhode Island House could level the state's grocery playing field, and encourage other states to join the fight against monopoly power.