Federalism, Substantive Preemption, and Limits on Antitrust

Posted by D. Daniel Sokol

Bruce H. Kobayashi and Joshua D. Wright (both of George Mason University Law School) discuss Federalism, Substantive Preemption, and Limits on Antitrust in their latest working paper.

ABSTRACT: In Credit Suisse v. Billing, the Court held that the securities law implicitly precludes the application of the antitrust laws to the conduct alleged in that case.  In that case, the court considered several factors, including the availability and competence of other laws to regulated unwanted behavior, and the potential that application of the antitrust laws would result in "unusually serious mistakes".  This paper examines whether similar considerations suggest restraint when applying the antitrust laws to conduct that is normally regulated by state laws and other federal laws.  In particular, we examine the use of the antitrust laws to regulate the problem of patent hold up of members of standard setting organizations.  While some have suggested that this conduct illustrates a gap in the current enforcement of the antitrust laws, our analysis finds that such conduct would be better evaluated under the federal patent laws, and under state contract laws.