Earlier this year, the U.S. Department of Justice launched an antitrust investigation into four automakers—Ford, Volkswagen, Honda and BMW—that agreed with the state of California to abide by emissions standards stricter than those backed by the Trump administration. Because California’s involvement arguably exempted the agreement from antitrust scrutiny under the state-action doctrine, antitrust experts from across the political spectrum questioned the investigation’s legitimacy. Many viewed it as an act of political retaliation by the Trump administration, not a genuine inquiry into whether the agreement violated the antitrust laws.

This focus on the investigation’s potential political origins, while well-founded, has overshadowed a broader issue raised by the investigation that may prove more consequential: antitrust’s role in governing environmental collaborations between competitors in the age of climate change.

Uncharted Territory

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