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Can antitrust law ever protect individual rights?
It would seem strange if it could. After all, the fundamental principle of antitrust is antithetical to individual rights: it holds that the government is entitled to organize the market, and that businessmen are merely decentralized planners tasked with deploying resources in order to serve consumers.
And yet, the North Carolina Board of Dental Examiners case, which was argued before the Supreme Court today , shows how it might: by restraining crony cartels that use the power of government to drive out their competitors.
North Carolina state law says only a dentist can remove stains on people’s teeth. And "any resident citizen" can sue to enforce the law if a non-dentist provides this service. The Board of Dental Examiners, the state agency that regulates dentists, is also specifically given that power . When teeth-whitening by non-dentists in malls and other such places, using a chemical process that may or may not fall under the prohibition on removing stains, became popular, the board investigated and sent out letters telling the non-dentists to stop. It said they were breaking the law. Naturally, this drove a lot of people out of their arguably illegal—but (otherwise) perfectly moral—business of whitening teeth.
The Federal Trade Commission responded by administratively charging the dental board with an antitrust violation. It argued that because most of the board members were (as state law requires) practicing dentists, they were businessmen conspiring together to drive their competitors out of the market. And that’s true.
But it’s also true that they were members of a state agency enforcing the law their agency was created to enforce (at least according to one plausible reading of that law). And the question before the Supreme Court today was whether the dental board’s action is protected by antitrust’s state action doctrine, which holds that the states are entitled to make and enforce policies that would violate antitrust law if they were established by private agreement.
Under existing precedents, if it treats the dentists on the board as businessmen working together to solve a common problem, the Court will rule against them. If, on the other hand, it treats them like professional bureaucrats telling people to stop producing because of an arbitrary law, the Court will rule in their favor. This illustrates the absurdity of antitrust law—and its moral principle: that government is entitled to run the market, but businessmen may only pursue their own interests in ways it suits governmental purposes to permit. Defenders of licensing boards like the Dental Examiners might invoke the same premise.
And yet, if the Court rules against the dental board, it will strike a blow against the all-too-widespread practice of giving established members of a profession the power to stop newcomers from competing with them. In this sense, it will put antitrust to work in defense of individual rights. For once, the oft-invoked mantra that antitrust protects the free market will have some truth to it.
Nevertheless, those advocates of the free market who are excited about this case should remember: when you rely on unjust laws, you give yourself an incentive not to fight them. And antitrust law is fundamentally unjust .
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