The regulated conduct defence allows antitrust immunity where conduct is required by federal or state regulation. The regulated conduct defence is important to ensure that the state can exercise its sovereign power to apply regulation that it deems justified for economic and/or social reasons even though the regulation may conflict with competition policy. The defence is also important to ensure firms do not face multiple and inconsistent legal demands, in particular from regulations and competition law. Nevertheless, the regulated conduct defence also bears important risks including high potential costs for society. Indeed, the defence may preserve unduly anti-competitive regulation entailing welfare cost not necessary for achieving the regulatory objective. The defence may also lead to competition law exemptions of only weakly regulated conduct. The roundtable identified circumstances when the regulated conduct defense is most appropriate and when it is least appropriate.
Regulated Conduct Defence