Antitrust Public Enforcement for NY State : An Attorney General’s Personal View
Scott Hemphill
Chief of the Antitrust Bureau in the Office of the New York State Attorney General
Dr. C. Scott Hemphill offered his thoughts on the role of state antitrust enforcement within the US federal system. He began by describing the unusual combination of powers possessed by a state Attorney General. An AG has extensive authority to investigate anticompetitive conduct, much like its federal counterparts at the Justice Department or Federal Trade Commission. In addition, when the state’s consumers or government agencies are harmed by anticompetitive activity, an AG has the capacity and responsibility to pursue a financial recovery. Hemphill outlined several components of a state enforcement agenda. One area of attention is high-impact local matters, such as bid-rigging that defrauds state agencies or consolidation among local health care providers. Attention to local matters is a natural consequence of a state enforcer’s superior knowledge of local conditions. Knowledge of local industries can also lead to investigations and litigation in industries with national scope—for example, in financial services, where the New York Attorney General has developed considerable expertise. As economic analysis becomes ever more important to U.S. antitrust policy, Hemphill noted, it must also become a centerpiece of state enforcement. At the investigative stage, such analysis is crucial to identify the actual or likely competitive effects of particular conduct. Moreover, as doctrine continues to shift away from per se liability and toward the rule of reason, economic analysis is necessary to shape a viable litigation strategy. An economic approach also permits a fresh look at traditional areas of state enforcement. For example, New York has conducted empirical analyses of state purchasing data as a way to uncover local bid-rigging. These techniques are borrowed from other enforcers, whose data-driven approach has identified collusion or manipulation in construction and financial services markets, among others. A second area is resale price maintenance, in which the Supreme Court has held that the rule of reason applies to claims under federal law. In its ruling, the Court invited further refinements of doctrine in response to new thinking. In response to an audience question, Hemphill sketched out a proposal to determine the actual economic effects of RPM today, as a first step toward accepting the Court’s invitation.
