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Supreme Court Affirms FTC Antitrust Authority Over Licensing Boards

Decision protects power of regulators to scrutinize such professional pa

By

BRENT KENDALL

Updated Feb. 25, 2015 5:01 p.m. ET

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The Supreme Court on Wednesday dealt a blow to professional licensing boards that use their powers to limit competition, in a case over teeth-whitening services in North Carolina.

The court, in a 6-3 opinion by JusticeAnthony Kennedy, upheld a 2010 case against the North Carolina State Board of Dental Examiners, an entity made up primarily of practicing dentists. The decision preserves the power of antitrust enforcers to scrutinize professional licensing organizations, even if they are designated as state-government entities.

The Federal Trade Commission alleged the board engaged in unfair competition when it attempted to stop hair salons and day spas from offering teeth whitening treatments at cheaper prices than the dentist's office.

The board had sent cease-and-desist letters to several non-dentists. The FTC said the dental board was motivated by financial self-interest, not health concerns. It barred the board from ordering non-dentists to drop teeth-whitening services.

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The dental board fought the FTC's right to bring a case at all, saying it was immune from an antitrust lawsuit because it was a government body, even though it was made up of private professionals.

The court rejected that argument, saying state government officials hadn't taken an active role in supervising the dental board's actions.

Federal antitrust law "does not authorize the states to abandon markets to the unsupervised control of active market participants, whether trade associations or hybrid agencies," Justice Kennedy wrote for the court.

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