State Antitrust Enforcement: Its’ Evolution and Future Direction

Abstract

State antitrust enforcement went through several dramatic changes from 1974 to 1982. This article charts its growth and decline during this period by measuring the number of actions filed by state antitrust programs, their funding and staffing. These measures indicate that state antitrust activity rapidly increased from 1974 to 1980 but has declined during the eighties because state antitrust programs lost federal funding and political support. This article also considers the changing focus of state antitrust enforcement by examining the type of defendant and substantive violation prosecuted, client represented, and relief sought in state antitrust actions. This examination shows that state antitrust enforcement shifted from multidistrict, treble damage suits against large, out-of-state enterprises to actions against small, in-state businesses. To explain the political and fiscal forces that have shaped state antitrust enforcement, this article compares antitrust enforcement in states with appointed attorneys general to that in states with elected ones, and among states with different funding sources for their programs. Based on these comparisons, it is argued that state attorneys general can overcome state antitrust's present political and fiscal crisis by bringing more consumer damage (parens patriae) suits and using revolving funds to finance enforcement. It is argued that state antitrust programs will make their greatest contribution to society by maximizing consumer welfare. They can do this by bringing actions against local price-fixers and bid-riggers, policing anticompetitive state regulation, and educating small businessmen and consumers about antitrust. This article offers suggestions for ensuring the long-term fiscal stability of state antitrust, including cooperative efforts designed to increase enforcement efficiency and modifications in revolving funds. The article concludes with the observation that state antitrust programs have provided a unique brand of locally oriented enforcement and this contribution will be lost unless state attorneys general act to achieve political and fiscal stability for these programs.