As big corporations gain more and more market share, they have wreaked havoc on the lives of small businesses, workers, consumers, and communities. But states have a strong history as frontline defenders of their citizens against the threat of powerful corporations. They passed our first antimonopoly laws, and, through the structure of our federal system, have the power to create laws that rein in corporate power and promote vibrant, democratic economies.
States can and should both exercise their existing antitrust enforcement power and strengthen and clarify their antitrust laws. Federal monopoly law and the state laws that mirror federal statutes have been under attack in the courts for the last forty or so years. Here are ways to make our state antitrust laws stronger and easier to enforce.
State lawmakers can restore their ability to end abuses by dominant companies by updating their monopolization statutes to include bright-line bans on abusive conduct and clear descriptions of how prosecutors and courts can demonstrate market dominance. At least two states, New York and Massachusetts, have introduced bills that would greatly strengthen monopoly standards in their own laws, while officials at the California Law Revision Commission have recommended lawmakers introduce similar legislation there.
Price discrimination, where big retailers bully manufacturers into giving them discounts and deals that smaller stores can’t access, is rampant in the retail industry. That’s partly because federal enforcement against price discrimination has been lax for decades, though recent cases suggest that may finally be changing. On top of that, court rulings have made enforcement of the federal law against price discrimination and its state equivalents difficult and confusing. Powerful corporations also abuse loopholes in the law to discriminate by offering different prices, package sizes, and access to products to different retail “channels” such as dollar stores and wholesale clubs.
States can enact or reform their own price discrimination laws to clarify which firms and conduct violate the law and to close the loopholes powerful manufacturers and retailers use to discriminate. Recently, lawmakers in Maine and Rhode Island introduced bills that would add discrimination protections and close loopholes in the grocery industry.
Ron Knox“States have a strong history as frontline defenders of their citizens against the threat of powerful corporations.”
Mergers have been a primary driver of corporate concentration. While federal enforcers examine regional and national mergers and sue to block those that threaten competition, state enforcers are best placed to know which tie-ups pose dangers within their borders. Some states have merger control statutes on the books, while others don’t. States should consider using federal and state law to challenge anticompetitive mergers. For example, two states — Washington and Colorado — sued on their own to block the Kroger/Albertsons merger, with Washington winning its case in court. States can also consider passing new merger control laws, particularly for industries such as healthcare, grocery, or agriculture that are often highly concentrated and can have an outsized effect on a state’s residents, farmers, and independent businesses.
Fourteen states expressly ban “unfair methods of competition,” while several others ban such conduct in more restrained ways. Such laws give state enforcers the power to go after abusive conduct that doesn’t explicitly violate other antitrust statutes. Some of those laws give state enforcers the power to make rules that can create guardrails for the economy and ban certain kinds of corporate abuses outright. Officials in states with such laws and authority should use them to prohibit dangerous corporate conduct broadly — conduct such as non-compete clauses in employment contracts, employee misclassification, ensuring right-to-repair for farmers and consumers, and other abuses that are difficult to address under the traditional monopoly statutes.
Fines in many states are very low — certainly too low to adequately deter abuses of corporate power. State lawmakers should strongly consider introducing legislation to increase antitrust fines. Lawmakers in Colorado and Washington passed such reforms in 2023 and 2024 respectively, greatly increasing penalties for monopoly abuses.
States with laws that ban illegal monopolization often don’t explicitly extend that ban to cases of “monopsony” — when a company is such a powerful buyer of goods or labor in an industry that it can single-handedly dictate contract terms to the farmers, ranchers, or companies it buys from, or wages and working conditions for its employees. Such power is just as dangerous, and just as prone to abuse, as a monopoly. State lawmakers can quickly and easily reform their monopoly statutes to make clear that abuses of buyer power also violate the law. States including New York, Minnesota, and Massachusetts have introduced legislation that would make clear that abuses of buyer-side monopoly power are just as illegal as traditional seller monopolies.
In many parts of the economy, dominant companies use their power through contracts and other means to dictate the practices of smaller, otherwise independent businesses. This kind of abusive conduct forces small businesses to charge certain prices, pay their employees certain wages, keep their businesses open during certain hours, and other means of maintaining control over other companies while undermining the responsibilities those small businesses have to their workers and their bottom lines. Not all such restraints are inherently bad, but many forms of dominance through contracts are harmful, particularly to farmers, workers, and franchisees. Clear legislation can ensure the most harmful kinds of vertical dominance end.
Justin Stofferahn. “The States Can Put the Brakes on Hospital Mergers.” The Sling (2023).
Noelle Phillips. “Colorado AG Breaks Up Anesthesiology Monopoly that Dominated Denver and Durango Health Care Markets.” The Denver Post (2024).
. “A New Opportunity for States to Take on Corporate Power.” Governing (Feb. 2023).
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