Chapter III. State Antitrust Merger Enforcement
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CHAPTER III
STATE ANTITRUST MERGER ENFORCEMENT
A. Introduction
Over the past several years, states have become more involved in the
antitrust review of mergers. Like any other person, states may bring
actions for damages, injunctive relief, and fees under Sections 4 and 16
of the Clayton Act.1 In addition, a state may act as parens patriae and
seek injunctive relief to prevent harm to its general economy.2 Because
of this parens patriae status, states do not face the standing and antitrust
injury problems that have limited private challenges to proposed merger
transactions.3
The state attorney general is the state’s legal official, almost always
elected, with jurisdiction over all matters that affect the state and its
citizens. Thus, attorneys general tend to focus on transactions that affect
a significant number of consumers or that affect a state’s economy or
proprietary interests. These transactions usually affect local markets,
such as hospitals and funeral homes, or retail markets, such as
supermarkets, department stores, and gasoline stations.
(1990); Hawaii v. Standard Oil Co., 405 U.S.251 (1972); Georgia v. Pa.
R.R. Co., 324 U.S. 439, 447 (1945).
to remedy injury to the general economy of the state).
3. The right of states to investigate and challenge mergers was made clear in
American Stores, 495 U.S. at 271. In that case, after the Federal Trade
Commission reviewed a merger and entered into a consent decree to
resolve its competitiv e concerns, the Attorney General of California
challenged the merger and sought, among other things, an order of
divestiture. Reversing the Ninth Circuit, the Supreme Court held that
private parties, including state attorneys general, have the right under the
Clayton Act to seek orders of divestiture against anticompetitive mergers,
and that this right exists despite inconsistent or conflicting actions taken
by a federal reviewing agency. By so holding, the Supreme Court
effectively concluded that the states had remedial authority comparable to
that of the federal agencies. Cf. Cargill, Inc. v. Monfort, Inc., 479 U.S.
104, 109 (1986) (discussing the injury that plaintiffs generally must
establish to obtain damages and injunctive relief).
State Antitrust Enforcement Handbook
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1. Increased Level of State Enforcement
Having been largely dormant for years, state enforcement efforts
escalated in the 1980s, in part as a response to a perceived reduction in
enforcement by the Reagan Administration.4 Faced with decreasing
federal enforcement at a time when mergers were increasing in number
and size, the states, through the National Association of Attorneys
General (NAAG), issued Horizontal Merger Guidelines (NAAG Merger
Guidelines) to help provide a framework for states to challenge mergers
on their own.5 Most states also adopted NAAG’s Voluntary Pre-Merger
Disclosure Compact (NAAG Compact) in 1987, which was revised in
1994, with the goal of encouraging parties to submit a copy of their
federal premerger filings to the states.6
2. History of Federal-State Cooperation in Merger Enforcement
Since the 1980s, the states have worked with federal agencies to
investigate and prosecute anticompetitive mergers. This new spirit of
cooperation was fostered in part by the 1989 formation of an Executive
Working Group on Antitrust. This group includes the attorneys general
who serve on the NAAG Antitrust Committee, the chair of the Federal
Trade Commission (FTC), and the Assistant Attorney General in charge
of the Antitrust Division at the U.S. Department of Justice (DOJ). The
4. For example, then New York Attorney General Robert Abrams observed
at the time, “We have been witnessing the watchdog put to sleep. The
states have had to fill the breach.” Daniel B. Moskowitz, Why the States
Are Ganging Up on Some Giant Companies, BUS. WK., Apr. 11, 1988, at
62, 62.
5. NAT’L ASS’N OF ATTOR NEYS GENERAL, HORIZONTAL MERGER
GUIDELINES (1993), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,406 and
Appendix B to this Handbook [hereinafter NAAG MERGER GUIDELINES].
6. NAT’L ASS’N OF ATTORNEYS GENERAL, VOLUNTARY PRE-MERGER
DISCLOSURE COMPACT (1994), reprinted in 4 Trade Reg. Rep. (CCH)
¶ 13,410 and Appendix C to this Handbook [hereinafter NAAG
COMPACT]. A list of the parties to the NAAG Compact, the NAAG
resolutions adopting the NAAG Compa ct, a background statement, and
the NAAG Compact itself are available at www.naag.org/assets/files/pdf/
200612-antitrust-voluntary-premerger-disclosure-compact.pdf, and in the
State Practices, Guidelines/Protocols section of the Web site of the State
Enforcement Committee of the ABA Section of Antitrust Law,
http://www.abanet.org/antitrust/committees/state-antitrust [hereinafter
State Enforcement Committee Web site].
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