Colorado, being home to many microbreweries, has established an alcohol distributorship that controls all distribution of beer within the state. Breweries in the surrounding states have complained to the FTC about this, complaining that Colorado has established a monopoly on the beer distribution market in that state that is harming their business. Will their complaints result in Colorado being assessed a violation of Section 2 of the Sherman Act?

Question

Quizplus · Accepted Answer

States are generally exempt from the Sherman Act under the doctrine of "state action immunity," which allows states to regulate their own economies, even if such regulation might otherwise conflict with federal antitrust laws. This principle means that actions taken by a state, in this case, Colorado, in regulating alcohol distribution within its borders, would not typically result in a violation of Section 2 of the Sherman Act.

Colorado, Being Home to Many Microbreweries, Has Established an Alcohol