state action antitrust immunity

As explained in Parker v. Brown , 317 U.S. 341 (1943) , under the state-action doctrine , state and municipal authorities are immune from federal antitrust lawsuits for actions taken pursuant to a clearly expressed state policy that, when legislated, had foreseeable anticompetitive effects.

When a state approves and regulates certain conduct, even if it is anticompetitive under FTC or DOJ standards, the federal government must respect the decision of the state. Therefore, if a state sanctions anticompetitive conduct, the state is immune from investigation and possible prosecution by the FTC.

This doctrine can apply to provide immunity to non-state actors as well if a two-pronged requirement is met:

  1. There must be a clearly articulated policy to displace competition; and
  2. There must be active supervision by the state of the policy or activity.

[Last updated in June of 2024 by the Wex Definitions Team ]

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