After Elon Musk poured almost $300 million into his campaign last year, President Trump returned the favor by endowing Musk with unrestricted authority to restructure the federal government. In just over two months, Musk has usurped congressional power and initiated the dismantling of agencies like USAID, the Consumer Financial Protection Bureau, and the Department of Education. Even while the courts have paused some of Musk’s and Trump’s more egregious actions, such as firing all probationary employees, the most conservative Supreme Court in a century cannot be counted on to stop their institutional destruction. Despite the ongoing gutting of federal institutional capacity to rein in big business abuses, Americans still have robust tools for controlling corporate power, most notably the states.
Indeed, the states were the first to take action against the threat to our economic liberties posed by corporate autocracy. Iowa enacted the first antitrust law in 1888, and Kansas followed with a substantially more forceful bill that would be a model for the Sherman Antitrust Act of 1890, which itself was designed for the “preservation of our democratic political and social institutions.” Throughout the 20th century, the federal government and the states enacted policies like public utility laws aimed at regulating corporate misconduct. It was precisely these laboratories of democracy that would assist federal efforts to rein in concentrated corporate power. With democracy under siege, states must once again take up the antimonopoly mantle and use the legal tools available to them to serve as a bulwark against corporate domination and as a force for democratic renewal in America. States have at least five powerful tools at their disposal—each ready for immediate use.
First, state enforcers can pursue policies that directly enhance workers’ individual freedom, mobility, and dignity. They should start by targeting coercive contracts or vertical restraints in antitrust parlance. Vertical restraints are contracts of domination by firms in a vertical relationship like a franchisor and its franchisees—that, in the words of the Supreme Court, “cripple the freedom” of workers and independent businesses.
A good first step is tackling non-competes. Non-competes deprive workers of a fundamental right—the ability to quit a job and obtain better employment elsewhere. Copious research, which has been conscientiously detailed in the FTC’s rule to ban non-competes nationwide, shows that these coercive contracts have little justification, depress wages, suppress business formation, and deter businesses from engaging in more socially beneficial conduct to retain workers, such as improving working conditions.
Over the past several years, many states, like California and Minnesota, have enacted laws that substantially restrict the use of non-competes across the economy. Recently, Ohio lawmakers proposed a sweeping bill that bans non-competes and their functional equivalents. Others must follow suit.
States have also enacted other laws that target vertical restraints aimed at distributors by a supplier. For example, Maryland enacted a law that makes resale price maintenance (RPM) illegal under state antitrust law soon after the Supreme Court broadly legalized the practice under federal law in 2007. RPM restricts the price at which a distributor can sell that good by establishing a price floor. For example, an RPM contract could prohibit a retailer from selling a pair of Nike shoes below the price specified by the company. The Supreme Court once classified RPM agreements as a contract of domination that deprived businesses of “the only power they have to be wholly independent businessmen.” Like other vertical restraints, these agreements can harm workers. The effect of these agreements was made clear after a McDonald’s franchisee complained to corporate about the crushing price ceilings (think of the McDonald’s dollar menu) imposed by the company’s RPM agreements. A representative told her to “just pay your employees less.”
At least in Maryland, Schonette Jones Walker, the chief of the state’s antitrust division, expressed her office’s willingness to enforce the state’s law during a recent American Bar Association event. Again, other states must swiftly do the same by initiating lawsuits targeting vertical restraints or enacting new legislation.
Second, public enforcers have a crucial role in holding corporations accountable to the communities they impact, not only by preventing further harm but also by fostering greater responsiveness to local economies. Corporate executives—increasingly private equity financiers—often treat their workers, trading partners, and local enterprises as nothing more than commodities to be discarded at will, with no regard for community welfare or the livelihoods destroyed. The primary way this harm occurs is through mergers. Antitrust law provides states with a readily available tool to address this problem.
Congress amended Section 7 of the Clayton Act in 1950 to restrict mergers and ensure corporations were accountable to the public. Senator Estes Kefauver—one of the lead drafters of the 1950 amendments—stated during the legislative debates that:
The control of American business is steadily being transferred …from local communities to…central managers [that] decide the policies and the fate of the far-flung enterprises they control…Through monopolistic mergers the people are losing power to direct their own economic welfare.
States can use Section 7 to tackle mergers head-on, particularly because robust case law from the 1960s remains controlling. For example, in Philadelphia National Bank, the Supreme Court held that a merger forming a firm with a 30 percent market share is “so inherently likely to lessen competition substantially that it must be enjoined.” Recently, too, Colorado and Washington State successfully stopped a merger between grocery giants Kroger and Albertsons using their state laws—demonstrating that these legal pathways can be just as viable avenues for restraining corporate power as their federal counterparts.
Third, states can enact policies that grant small businesses and workers a more direct role in governing the economy by endowing them with the power to shape the rules of the marketplace. As I have previously described in The Sling, nail salonists in New York endure terrible working conditions—including breathing in large quantities of toxic chemicals—and receive sub-living wages. New York has previously proposed to address this problem by creating a wage and standards council. The council would authorize small businesses to collectively determine the wages and work standards to which all salonists must adhere. Traditionally, such coordination among market participants violates the antitrust laws, but due to a doctrine called Parker Immunity, state legislatures are able to shield the behavior from antitrust scrutiny.
This democratic process enables market participants to shift the variables of competition that are corrosive to workers and businesses to more desirable factors such as service quality. Simply put, states exercising their power under Parker Immunity can make our markets more democratic by granting workers and firms a mechanism to voice their concerns and make collective wage and price decisions.
Many states have started recognizing the value of increased democratic coordination between market participants and enacting their own piecemeal legislation. California recently enacted a law to raise wages and improve working conditions for fast-food workers. The law establishes a council of franchisors, franchisees, and workers to determine minimum standards and wages for the industry. The council established a $20/hour minimum wage in 2024. In 2023, Minnesota enacted a similar law for nurses.
States should also use Parker Immunity to counterbalance the power of dominant corporations. For example, over the last few decades, digital platforms like Google and Meta have extracted billions in digital advertising while squeezing the news industry—profiting from its content without fair compensation. This stranglehold over the technology and information pipeline has left news outlets struggling to survive.
The proposed federal Journalism Competition and Preservation Act and many state counterparts aim to help the beleaguered news industry by authorizing them to collectively negotiate fairer terms with Google and Meta regarding the distribution and web crawling of their content. Although the bill passed out of the Senate Judiciary Committee with bi-partisan support, Senator Schumer did not bring the bill to a full Senate vote, reportedly due to a conflict of interest. State lawmakers should adopt legislation to help vulnerable market participants aggregate their power to secure fair wages, prices, and working conditions.
Fourth, states can ensure all businesses have an equal opportunity to succeed on their own merits. In particular, states can ensure businesses treat their trading partners and consumers on non-discriminatory grounds by imposing common carriage obligations (CCOs) onto their business operations.
CCOs are ancient in our law—remnants of which extend back to the Code of Hammurabi. CCOs are simple. Whether through the courts’ common law or an enacted law, firms classified as “common carriers” must treat consumers and their trading partners on non-discriminatory terms. Common carriers must offer reasonably similar terms and prices to all customers. For example, if Meta were a common carrier, it could not arbitrarily prohibit news from being transmitted on its platform or modify its algorithm to preference some news outlets over others. Likewise, if Amazon were a common carrier, it could not strike special deals with large consumer goods manufacturers or penalize marketplace sellers for not using its logistics services.
While too often honored in its breach, the principle of equal, non-discriminatory treatment has been an important part of American public policy. It is enshrined in foundational documents, from the Declaration of Independence to the 5th and 14th Amendments of the Constitution. This principle has also shaped key legislation. For example, the Robinson-Patman Act prohibits discriminatory pricing practices, making it unlawful to grant preferential treatment to certain trading partners. Similarly, the Civil Rights Act of 1964 ensures equal access to commerce and employment by prohibiting discrimination based on race, color, religion, sex, or national origin.
CCOs embed the principle of equality into our economic life and therefore strike at the heart of oligarchy by substantially limiting corporate power over business relationships. They ensure that firms and individuals cannot be denied access to essential channels of commerce or subjected to unfair pricing and terms. Indeed, in the early 20th century, CCOs were seen as a “solution to the trust problem.”
State legislatures can enact legislation, or state AGs can initiate lawsuits to have courts designate dominant, oligarch-controlled firms as common carriers. Currently, Ohio’s state attorney general is in a protracted battle to classify Google as a common carrier. If successful, Ohio’s lawsuit could provide a template and incentive for other state law enforcers to replicate.
Fifth, some state AGs can directly structure the marketplace to require businesses to engage in competition that enhances the public’s welfare, job creation, and innovative activity, by using their law enforcement powers against “unfair methods of competition.” While many states can initiate lawsuits piecemeal, 12 state AGs are empowered to declare a specific business practice unlawful as an “unfair method of competition.” The laws of these states also contain reference clauses that align their interpretation with federal case law, which currently maintains an expansive interpretation of what constitutes an unfair method of competition.
Using this authority, state AGs can demonstrate their commitment to deploying every available regulatory tool to protect consumers, workers, and fair competition. As “The People’s Lawyer,” a state AG can not only quickly establish bright-line rules defining unlawful conduct, but also swiftly recalibrate how firms compete in the marketplace and how consumers and workers are treated under state law. By prohibiting business practices like those detailed in this article, public enforcers help uphold democracy by reinforcing the idea that democratic institutions, not private monopolies, should govern the economy.
Of course, enacting new legislation takes time and political will, and state legal departments are notoriously understaffed and under-resourced. But action is imperative. With Trump and the world’s richest man gutting critical parts of the federal government, either states take up the challenge to be one of the last defenses against oligarchy, or the public must come to terms with the fact that every layer of the American system of government has failed to protect them.
While state actors contemplate how to act, the public is already demanding change. As Senator Bernie Sanders’ current National Tour to Fight Oligarchy and the nationwide Hands Off protests against the Trump Administration demonstrate, millions of Americans are already mobilizing to resist corporate rule. The only question now is whether state enforcers and lawmakers will march alongside them.
Daniel A. Hanley is a Senior Legal Analyst at the Open Markets Institute. You can follow him on X, Bluesky, and Mastodon @danielahanley.