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therefore subject to federal regulation under federal antitrust laws.154 The Act exempts from federal antitrust laws the “business of insurance,” including health insurance, to the extent that it is regulated by state law.155 In doing so, the McCarran-Ferguson Act confirmed states’ authority to regulate and tax insurance. This is not a blanket exemption from federal antitrust law; activities are only exempt from federal regulation if they meet three requirements: 1) the activity falls within “business of insurance,” 2) the activity is regulated by state law, and 3) the activity in question does not involve actions or agreements to boycott, coerce, or intimidate.156 If an activity is found to be included in the “business of insurance,” but not regulated by state law, then the activity is subject to regulation under federal antitrust laws.157 Three main federal laws govern antitrust: 1) the Sherman Act,158 2) the Federal Trade Commission Act,159 and 3) the Clayton Act.160 In addition to federal law, most states have passed antitrust state statutes that often mirror federal language.161 The Sherman Act prohibits “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.”162 In its application, the Sherman Act prohibits both unreasonable restraints of trade as well as blatant arrangements between competing individuals to price fix or unfairly alter the market.163 Violations occur as a result of both case-by-case analyses of what constitutes unreasonable restraints of trade and blatant “per se” violations.164
154. Michael Cowie, Health Insurance and Federal Antitrust Law: An Analysis of Recent Congressional Action, ANTITRUST SOURCE, AM. BAR ASS’N 1, 2 (Dec. 2009), http://www. americanbar.org/content/dam/aba/publishing/antitrust_source/Dec09_Cowie12_17f.authchec kdam.pdf. 155. Cowie, supra note 154, at 7. Courts analyze three factors in determining whether a practice constitutes the “business of insurance”: ( 1) whether the practice has the effect of transferring a policyholder’s risk, ( 2) whether the practice is an integral part of the policy relationship between insurer and policyholder, and ( 3) whether the practice is limited to entities within the insurance industry. Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982); Cowie, supra note 154, at 2. 156. 15 U.S.C. §§ 1011–1015 (2001). 157. Cowie, supra note 154, at 1. 158. 15 U.S.C. §§ 1–2 (2013). 159. 15 U.S.C. § 45(a)( 1) (2010). 160. 15 U.S.C. §§ 12–27 (2000). 161. See, e.g., WASH. STATE OFFICE OF ATTORNEY GEN., GUIDE TO ANTITRUST LAWS, http://www.atg.wa.gov/antitrustguide.aspx (last visited Apr. 7, 2016). 162. FED. TRADE COMM’N, GUIDE TO ANTITRUST LAWS: THE ANTITRUST LAWS, https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws (last visited Mar. 28, 2016) [hereinafter FTC, GUIDE TO ANTITRUST LAWS]. 163. Id. 164. Id.