Sherman's Missing 'Supplement': Prosecutorial Capacity, Agency Incentives, and the False Dawn of Antitrust Federalism

46 Pages Posted: 11 Sep 2019 Last revised: 14 Mar 2020

See all articles by Daniel Rauch

Daniel Rauch

Yale University - Law School

Date Written: March 12, 2020

Abstract

When the Sherman Act passed in 1890, it was widely expected that it would operate primarily as a “supplement” to vigorous state-level antitrust enforcement of state antitrust statutes. This did not happen. Instead, confounding the predictions of Congress, the academy, and the trusts themselves, state antitrust enforcement overwhelmingly failed to take root in the years between 1890 and the First World War. To date, many scholars have noted this legal-historical anomaly. None, however, has rigorously or correctly explained what caused it. This Article does.

Using primary, historical, and empirical research, this Article establishes that the best explanation for the early failure of state antitrust enforcement was prosecutorial incapacity: state attorneys general and local prosecutors simply lacked the incentives and resources to prosecute antitrust cases. Along the way, the Article also offers a rigorous rejection of each main alternative explanation proposed for the early failure of state antitrust enforcement, including those based on doctrinal constraints, state-statutory texts, and contemporary politics. Finally, the Article closes by suggesting implications this historical insight might suggest for the cutting-edge issues facing today’s state antitrust enforcers, from local efforts to control healthcare costs to multistate actions against Silicon Valley behemoths like Apple and Amazon.

Keywords: antitrust, federalism, sherman act, legal history, state attorney general, state attorneys general, amazon, uber

Suggested Citation

Rauch, Daniel, Sherman's Missing 'Supplement': Prosecutorial Capacity, Agency Incentives, and the False Dawn of Antitrust Federalism (March 12, 2020). Daniel E. Rauch, Sherman's Missing "Supplement": Prosecutorial Capacity, Agency Incentives, and the False Dawn of Antitrust Federalism, 68 Clev. St. L. Rev. 172 (2020) , Available at SSRN: https://ssrn.com/abstract=3448115

Daniel Rauch (Contact Author)

Yale University - Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States

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