State regulatory boards may want to change their ways to avoid antitrust liability following a recent U.S. Supreme Court decision against a North Carolina dental board, Federal Trade Commissioner Maureen Ohlhausen said in a speech Tuesday.
Ohlhausen, however, said she doesn't think such changes will be overly burdensome.
“I believe state boards have several viable options for avoiding both antitrust liability for, and excessive oversight of, their conduct,” she said. “These options should not be terribly onerous to implement and should help states retain individuals with sufficient relevant experience on their regulatory boards.”
She suggested three main changes. First, boards should be more cognizant of trying to avoid making decisions that would hamper competition. Second, states might want to consider changing the makeups of their boards so the majority of members are not active market participants (such as practicing doctors).
Third, if a state still wants most of a board's members to be active market participants, the state could more actively supervise the board to help it avoid antitrust action, she said. For example, ultimate regulatory decisions could be made by legislative committees, state agencies or other disinterested state officials.
In the same speech, given at the Heritage Foundation in Washington, Ohlhausen also said states might want to re-evaluate what she called “excessive state-licensing regimes” in light of the recent Supreme Court decision. Studies have noted it's more common for occupational licensing to reduce employment and increase prices and wages of workers than to improve the quality and safety of services, she said.
Ohlhausen's comments came more than a month after the Supreme Court ruled against a dental regulatory board in the North Carolina Board of Dental Examiners v. Federal Trade Commission case. At issue was whether the board, composed mostly of practicing dentists, should have been able to tell competing nondentists in mall kiosks to stop offering teeth-whitening services.
Lawyers for the board had asserted that it should be immune from antitrust laws as a state agency. But the Supreme Court decided 6-3 that the board illegally suppressed competition. In an opinion written by Justice Anthony Kennedy, the majority said North Carolina did not actively supervise the dental board, which meant it was not immune from antitrust action.
Nationwide, it's common for states to establish regulatory boards consisting of members of the profession being regulated. In an amicus brief, the American Medical Association, American Dental Association and others warned that paring back the numbers of practicing doctors on regulatory boards could affect patient safety.
“Neither the FTC nor private antitrust plaintiffs are well-situated to determine what constitutes the practice of medicine or dentistry, much less how to best regulate the practice of medicine or dentistry to protect the health and well-being of patients,” according to the brief.