Credit Suisse, Regulatory Immunity, and the Shrinking Scope of Antitrust

Abstract

In Credit Suisse Securities v. Billing, the U.S. Supreme Court dismissed a variety of antitrust claims brought by investors against underwriters from whom they had purchased securities, on the theory that securities underwriting is implicitly immune from antitrust scrutiny because it is an activity regulated by the securities laws. The underwriting firms had been accused, among other things, of "tying" the sale of some securities to the purchase of others, a practice of which both the SEC and antitrust (at least in some circumstances) disapprove.

Credit Suisse has important implications for antitrust practice. The decision's effect is to narrow the scope of antitrust law and to invite efforts by regulated industries to narrow it still further. The court's "clearly incompatible" standard is new and (though it purports not to) seems to water down considerably the old "plain repugnancy" test of Gordon v. New York Stock Exchange, Inc. 422 U.S. 659, 682 (1975). Under the new incompatibility standard, there no longer has to be an actual conflict between antitrust and other federal law for antitrust implicitly not to apply. Even a mere regulatory overlap may now be sufficient to trigger antitrust immunity.

Going forward, the Court will need to tighten the rule in Credit Suisse if it wants antitrust to continue to operate as Congress intended it to in conjunction with the compartmentalized maze of federal regulatory law.

Keywords: antitrust, antitrust immunity, securities, regulatory immunity