Justices Rule Antitrust Applies, Special Privilege Doesn't

Antitrust law often works to the detriment of extraordinarily productive businesses, such as Google . And it's based on the moral premise--the immoral premise--that all productive activity exists for the sake of the public, not for the sake of the people who engage in it.

(I'm working on a paper on that point.) But today, the Supreme Court handed down a ruling against an antitrust defendant, and it was, if not a blow for individual rights, at least a mild setback for those who think that because they work for governments, they're not bound by the same laws as the rest of us.

There is an exception in antitrust law called "state-action immunity." It holds that a state may do, if it so decides as a matter of policy, things that would violate antitrust law if done by private parties. For example, the state of California once organized raisin growers into a cartel; such organizing by the raisin industry alone would have been a blatant antitrust violation, but it was legal because the state did it.

In the case the Court decided today, a local government agency set up under Georgia law to run hospitals claimed it was entitled to take over additional hospitals without being subject to antitrust scrutiny by the federal government--just because it was a government agency endowed with a variety of powers by the state. The Court rejected the argument, on the ground that nothing in the Georgia law authorizing the creation of agencies to run hospitals clearly anticipated that the agencies would do things antitrust law normally prohibits. Sure, the state authorized the agencies to buy hospitals, but its general corporate law authorizes business corporations to buy things too; that doesn't mean either hospital agencies or businesses can ignore antitrust law.

Federal Trade Commission v. Phoebe Putney Health System doesn't overturn the state action doctrine. It does not say that the Georgia legislature could not have granted hospital agencies the power to monopolize, only that it did not--and that the agencies' mere creation by the state to serve a governmentally set purpose did not set them above antitrust law.

The Supreme Court thus refused to expand state-action immunity into a rule that any agency with a special state charter is above antitrust law. Whether antitrust law is just or unjust, putting everyone with a special connection to the state above it would have been yet another instance of "special" people having special privileges. The court's refusal to do that is a victory, however narrow or slight, for equal justice under law.

spiderID=3158

‍