Balancing Federalism and Free Markets: Toward Renewed Antitrust Policing, Privatization, or a State Supervision Screen for Municipal Market Participant Conduct

The past decade has witnessed an historic rejection of state control of markets in eastern Europe. Expansion of domestic antitrust immunity policy toward municipal businesses based upon federalism concerns, however, which occurred during the same period, has fostered autonomous governmental control of markets. The judicial application of the Parker doctrine to local government has tended to contradict the premise underlying several generations of U.S. foreign policy designed to support emerging competitive market economies outside the country. Academic analysis of the Parker doctrine during the 1980s was heated and creative. A number of commentators, with varying viewpoints, have addressed the bases for and appropriateness of municipal antitrust immunity. This article, after summarizing the currently ambiguous state of the caselaw and reconsidering prior characterizations of Supreme Court doctrine, will attempt to synthesize those views. The article will argue that the balancing of federalism and free market concerns as first addressed in Lafayette, modified in Midcal, and confirmed in Ticor, constitutes the best policy toward municipal market participant conduct and the only practical alternative to the privatization of municipally-owned business. In light of legislated damages immunity, Hallie should be reversed to limit municipal market participant antitrust immunity to those situations in which the state not only authorizes proprietary municipal conduct which would displace competition, but also acts in its sovereign capacity, through the creation of public utility or similar control, to actively supervise non-competitive municipal business practices