Antitrust Guarantee | Regulatory Review

The United States Constitution requires the federal government to “guarantee” to each state a republican form of government. The uncertainty about what this obligation means has made the Guarantee Clause a dormant source of constitutional protection. But vague language is no excuse for dormant important self-government protections. Lawyers, legislators, and other officials who have taken an oath to uphold the Constitution, as well as scholars, have no choice but to avoid its provisions simply because they are complex or unclear. The duty to faithfully interpret and enforce The Guarantee Clause is especially important in the face of a threat to core republican ideals that was unforeseen by the Founding Fathers – who, according to the Brookings Institution, are the “global goliaths of the modern era” – today’s multinational corporation.

What obligation the Guarantee Clause imposes is a matter of 235 years of debate. Courts have long avoided resolving the Clause’s ambiguities. The courts’ avoidance is justified by judicial humility, which advises courts not to answer political questions. Some scholars, by contrast, have suggested that the obligation can compel even such ambitious results as protecting the right to a high-quality public education and shielding states from federal regulation.

The potentially bold and sweeping interpretations that the Clause might encourage explain its dormant status. To cast the Guarantee Clause as an obligation to insist on any rational conception of republicanism could lead to a flood of judicial, congressional, or presidential intervention in state affairs. In an article arguing for a broader use of the Guarantee Clause, Kip M. Hustace, a professor at Seattle University School of Law, suggests that “we ignore the republican guarantee because it imposes an obligation to produce a demanding republicanism.”

A narrower definition of republicanism based on the social and legal context of the founding era may end an era of problematic constitutional neglect. A consensus understanding of at least part of the obligation imposed by the Guarantee Clause cannot wait. The growing dominance of large corporations over the economic and social lives of ordinary Americans justifies a reexamination and resolution of the meaning of the clause.

One novel but compelling way of understanding the Clause is as an embodiment of the “Antitrust Guarantee.” At the core of republican self-government is freedom from dependency. Any entity—public or private—that threatens the ability of individuals to act as free agents undermines this fundamental republican ideal. Several multinational corporations—notably Amazon, Apple, Google, and Meta, the “Big Four”—do just that. A state that fails to contain such threats to republican self-government triggers the Guarantee Clause. Although a full analysis of this simple understanding and application of the Clause is beyond the scope of this essay, scholars and defenders of republican self-government should consider it.

Freedom from dependency characterized the transition from the rule of King George to the rule of the people. At the time of the American Revolution, legal and social conventions reflected the range of relationships in which certain individuals found themselves. People—subject to the will of another person or authority. The poor were dependent on cities for shelter. Wives and children were dependent on male heads of households. Workers were dependent on their employers. Colonists were dependent on their king. Independence served to break some of these forms of dependency.

In an article on the history of dependency and republicanism, Robert J. Steinfeld, professor emeritus at the University at Buffalo School of Law, notes that “the traditional political conception of ruler and subject did not survive the American Revolution.”

At least, that was not the intention of republican self-government. Individuals independent of the wills of others—free agents—were the basis of the nation’s emerging republican political community. Workers, freed from the will of employers and bound only by the terms of an explicit contract, for example, soon joined that community. This concept of free agency shaped the early debates and political decisions about expanding the nation’s republican community. A simple principle guided these deliberations: “The American people have established a self-governing people as the ultimate source of political order.”

This concept of republican freedom—and self-government more broadly—is under threat. Just as John Adams feared political participation by people who “speak and vote according to the dictates of some property owner who has bound their minds to his interests,” there is every reason to fear that multinational corporations like Amazon, Apple, Google, and Meta are threatening our status as free agents. A hearing by the U.S. House of Representatives Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust revealed the extent to which these companies shape public discourse and, by extension, guide individual thought—both of which are in direct opposition to republican self-government.

The hearings also revealed that many Americans are effectively dependent on these companies. U.S. Representative David N. Cicilline (D-RI), the subcommittee chairman, made that point clear when reviewing the subcommittee’s key findings in his opening statement, in which he argued that “each individual action by one of these companies could affect hundreds of millions of us in profound and lasting ways.”

The subcommittee’s findings have numerous statutory implications. For example, they upheld U.S. District Judge Amit P. Mehta’s recent decision that Google is a monopoly under Section 2 of the Sherman Act. But the legal implications of these practices do not end there—or at least they do not end with a faithful application of the antitrust safeguard. The Constitution provides all Americans with another means of protection against those who threaten their ability to govern themselves.

Under the Antitrust Statute, the federal government must insist that the states, which have legal authority over these corporations, prevent them from infringing on the republican liberty of others.

These corporations did not exist in the state of nature. They are creatures of state government—in most cases, Delaware. Along with some 300 other Fortune 500 companies incorporated in that state, the Big Four turned to Delaware’s anti-Republican laws to legally establish themselves. It is easy to see why they have converged on that state. Delaware not only has lax statutory requirements, but it also lacks the ability to meaningfully enforce those requirements for the 1.4 million companies incorporated there. Corporations like the Big Four, in turn, have broad and excessive discretion to act as they see fit. As the Subcommittee pointed out, this discretion often comes at great cost to other Americans. Residents of other states have no real means of protecting themselves from the enormous power these companies have over key parts of their daily lives.

How the federal government should fulfill the Antitrust Guarantee in this context deserves additional scholarly study. To begin that process, I will share one proposal I am considering—insisting that Congress enforce minimum state statute provisions for all corporations engaged in interstate commerce. Numerous other interventions could fulfill the federal government’s obligations. The key takeaway is that the government has an obligation to look beyond the Sherman Act, the Clayton Act, and other antitrust laws when corporations act in an anti-Republican manner.

To paraphrase Justice Louis Brandeis, we can have a republican form of government in this country, or we can have great wealth concentrated in the hands of a few, but we cannot have both. The Constitution requires the federal government to choose the former over the latter. While this antitrust guarantee may seem radical today as a result of the dormant guarantee clause, it is consistent with the understanding of many of the Founding Fathers. Thomas Jefferson, for example, “believed that in order to enjoy the liberties protected by law, there must be constant government intervention in society and the economy. Otherwise, economic, political, and religious freedoms would be empty promises.”

The Safeguard Clause is one such empty promise today. Corporations with unchecked power have made millions of Americans dependent on them for essential news and products. Antitrust laws are not the only way to address such behavior, and in some cases they may not achieve such behavior. However, implementing the Safeguard Clause would prevent individual states like Delaware from subjecting the rest of America to the negative consequences of anti-Republican laws.