This week the Federal Trade Commission (FTC) issued its much-anticipated Staff Guidance on what sort of supervision states should provide to regulatory boards in order for those boards to qualify for antitrust immunity. In March, we sent out an alert describing a new Supreme Court antitrust decision that could have significant implications for state regulatory agencies throughout the country. The FTC brought suit against a state dental board, claiming that it had illegally suppressed competition by sending cease-and-desist letters to non-dentists that implied the non-dentists broke the law byproviding teeth whitening services. The Court rejected the board’s state immunity argument because the board was made up of a controlling number of “active market participants”—practicing dentists. When that is true, the Court held, a regulatory board will only be immune to antitrust law if the state provided “active supervision” over the challenged action. Whether active state supervision exists is context specific, but the Court did advise that it does not mean “micromanagement.”

The FTC’s new Guidance defines an “active market participant” as any person licensed by the board or any person providing a service that is subject to the regulatory authority of the board. This definition, if followed by courts, broadens the spectrum of boards that need active state supervision to get antitrust immunity.