The Supreme Court will hear arguments tomorrow in N.C. Bd. of Dental Examiners v. FTC, which asks whether states can immunize people from prosecution under the antitrust laws when they use government power to crush economic opportunity and free competition. In his column this weekend, George Will explains how this case touches on important broader themes of liberty and responsible government.
The case began when North Carolina dentists, deputized by the state to regulate the practice of dentistry, tried to block competition by people performing “teeth whitening”—a commonplace, safe procedure you can do at home with an over-the-counter kit. They used their official powers to threaten teeth whiteners with prosecution for practicing dentistry without a license. When the Federal Trade Commission said that this violated the antitrust laws, they claimed immunity from those laws because they were working for the state. And it’s true: the only entity that can really create monopolies—the government—is typically immune from federal antimonopoly laws. But in this case, the courts said no: the officials weren’t being sufficiently supervised to ensure that they acted in the public interest, instead of preventing their own competition—so they were not immune.
We filed a brief, joined by our friends at Cato, arguing that the Court should rein in these antitrust immunity doctrines. It makes no sense that private parties face prosecution for so-called anticompetitive acts (which are often innocent, and benefit consumers—the antitrust laws are so irrational), while government can do the same, or much worse, with impunity.
As Will notes, today’s antitrust immunity doctrines help perpetuate an attitude that the founders expressly rejected, in which “commercial interests collaborated with governments that protected them against competition.” This, Will writes, is a “residue of the mercantilist mentality, which was a residue of the feudal guild system, which was crony capitalism before there was capitalism.” The founders hoped that what they called the “compound republic” of federal and state powers balancing each other would prevent such abuses. Sadly, in this area, courts have simply shrugged at the problem.
We hope that the Supreme Court will reverse that trend and hold that, at least in this area, government cannot restrict economic liberty with impunity. Whatever one thinks of antitrust law (and we aren’t fans), there’s no justification for allowing the government to deprive people of economic liberty in ways that would be considered criminal if private parties did it. A win for the FTC in this case would at least put a small tool in the hands of entrepreneurs to defend their right to earn a living.
You can read the rest of Will’s column here, and my Regulation magazine article, which he quotes, here.