Antitrust and Unfair Competition Law

Competition: SPRING 2023, Vol 33, No. 1

DORMANT COMMERCE CLAUSE: A POTENTIAL BRAKE ON STATE ANTITRUST LEGISLATION

By Shira Liu1

The California Legislature has instructed the California Law Review Commission ("CLRC") to study expanding California’s Cartwright Act.2 The CLRC has been instructed to study whether to outlaw monopolies and redefine antitrust injury.3Either of these changes could expand the Cartwright Act beyond the current reach of federal antitrust law.4 The CLRC has also been instructed to consider adding state-level merger enforcement to the federal regime.5 These proposals are similar to those in New York’s proposed "Twenty-First Century Anti-Trust Act," which would expand New York’s antitrust law beyond the current reach of federal antitrust law and implement state-level merger enforcement.6 New York’s bill died in an Assembly Committee in June 2022, but its sponsor is seeking to reintroduce the bill in a future session.7

It is well-established that federal antitrust laws do not preempt state antitrust laws.8 But that does not mean that states have unlimited authority to expand their antitrust laws. One potential limit to state antitrust laws is the dormant Commerce Clause. As state legislatures consider expanding the reach of state antitrust laws, they should do so with an awareness of potential dormant Commerce Clause challenges.

I. FROM DUAL FEDERALISM TO THE DORMANT COMMERCE CLAUSE

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