Antitrust policy should target government monopolies

Recent headlines involving antitrust law have focused on government investigations into “big tech” companies, like Facebook and Google. That’s amusing, given that it’s the government that is the biggest perpetrator of monopolistic behavior. It’s now widely recognized that state licensing boards, often dominated by industry players, weaponize regulations to keep would-be competitors out of business.

A good example of anti-competitive conduct by state regulators is “licensure creep,” the phenomenon by which regulators interpret their authority as encompassing more and more ancillary services in order to create a monopoly over those services.

Take the attempt of dental boards requiring licensure as a dentist to offer teeth whitening with LED lights — lights that are no more powerful than a household flashlight. The only reason for requiring somebody to obtain a full-blown dentist’s license to set up a mall kiosk for whitening teeth is to keep out fair competition.

The FTC recently investigated the Alabama Board of Dental Examiners for enforcing teledentistry restrictions against web-based teeth-straightening business SmileDirectClub. But, just like the North Carolina Board, the Alabama Board is arguing that as a state regulator, its attempt to squeeze out competition is immune from antitrust law.

Alabama’s actions should come as no surprise. Research from Arizona State University’s Center for the Study of Economic Liberty demonstrates that when more market insiders sit on boards, license requirements become more restrictive (and therefore anti-competitive). Alabama’s seven-person dental board is composed of six dentists and one dental hygienist.