Antitrust Immunities And Defenses

• Pages: 63-73

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CHAPTER IV

ANTITRUST IMMUNITIES AND DEFENSES

As both the electric and gas industries have moved from a regulatory

to a deregulatory environment, firms in these industries have had to

adjust their business activities to take into account applicable federal and

state antitrust laws. This requires both consideration of the potential

sources of antitrust liability, and the defenses and immunities that are

available to rebut antitrust claims.

The antitrust statutes most likely to concern firms operating in the

energy sector are Sections 1 and 2 of the Sherman Act204 and Section 7 of

the Clayton Act.205 As a general matter, Section 1 of the Sherman Act

prohibits unreasonable agreements in restraint of trade while Section 2

prohibits monopolization, attempted monopolization, and conspiracies to

monopolize. Section 7 of the Clayton Act prohibits mergers or

acquisitions that may substantially lessen competition or tend to create a

monopoly.206 Specific issues arising under each of these statutes are dealt

with in subsequent chapters.

Firms operating in regulated industries are accustomed to avoiding

antitrust liability under these statutes because of the existence of certain

immunities. However, the same behavior that might be protected or even

encouraged when done in a regulated environment could lead to antitrust

exposure when pursued on the unregulated side of the business.

Deregulation makes it especially important that energy companies

change their behavior accordingly. As deregulation progresses at

different paces in different areas of the country, the nature and scope of

remaining immunity could differ.

When private parties make decisions, the risk of antitrust liability is

far greater than when regulators make the decisions. This, of course, is

not to say that there is no antitrust risk when regulators are involved, as

numerous cases attest. It is only a reminder that risk comes in degrees,

and the degree of risk for antitrust liability is rising sharply with

deregulation in the energy markets.

204. 15 U.S.C. §§ 1, 2 (1997).

205. 15 U.S.C. § 18 (1997).

206. Each of these statutes is addressed at length in ABA SECTION OF

ANTITRUST LAW ANTITRUST LAW DEVELOPMENTS (5th ed. 2002) (ALD

V): Ch. I Restraints of Trade § 1; Ch. II Monopolization and Related

Offenses § 2; and Ch. III Mergers and Acquisitions § 7 (5th ed. 2002).