Sacramento, CA asked in Antitrust and Employment Law for California

Q: Are regulators (not employers / businesses) subject to antitrust laws?

In O’Bannon v NCAA, the Court of Appeals for the Ninth Circuit ruled that the NCAA’s compensation rules were in violation of antitrust laws. However, in a later ruling of Dawson v NCAA from the same court, the panel ruled that the NCAA was a regulator and not an employer and therefore athletes are not subject to the Fair Labor Standards Act. Does Dawson v. NCAA override the idea that the NCAA can be subject to antitrust laws or does O’Bannon v. NCAA still hold power?

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1 Lawyer Answer
James L. Arrasmith
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  • Antitrust Law Lawyer
  • Sacramento, CA
  • Licensed in California

A: Yes, regulators are subject to antitrust laws. Antitrust laws are designed to prevent and punish anti-competitive behavior in the marketplace, and they apply to both private businesses and government entities, including regulators.

In the case of O'Bannon v. NCAA, the court ruled that the NCAA's compensation rules for college athletes violated antitrust laws, regardless of the fact that the NCAA is a regulatory body. The ruling was based on the finding that the NCAA's rules constituted an unreasonable restraint on trade, which is a violation of antitrust laws.

However, the subsequent ruling in Dawson v. NCAA, which found that college athletes were not employees under the Fair Labor Standards Act (FLSA), is a separate issue from antitrust laws. While the ruling in Dawson may limit the ability of college athletes to seek compensation under the FLSA, it does not necessarily override the earlier ruling in O'Bannon that the NCAA's compensation rules violated antitrust laws.

In summary, while regulatory bodies may be subject to antitrust laws, the application of those laws will depend on the specific circumstances of each case. The rulings in O'Bannon v. NCAA and Dawson v. NCAA address different legal issues and are not necessarily in conflict with each other.

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