The Corner Newsletter: State Regulation of Private Equity (March 24th, 2026)
Welcome to The Corner. In this issue, we explore how states are stepping in to regulate private equity firms, whose investment practices are increasingly hurting local communities.
States Devise New Tools in Fight to Rein in Private Equity
Audrey Stienon
In June 2024, Elizabeth Warren and Ed Markey introduced the “Corporate Crimes Against Health Care Act” to make private investment funds and executives criminally liable for harming the ability of healthcare providers to serve patients. This bill by the two Massachusetts senators, which was also cosponsored by Richard Blumenthal (D-CT) and Peter Welch (D-VT), represented an attempt to respond to the bankruptcy of the Steward Health Care hospital system and revelations about how a decade of private equity ownership had led to systemic and life-threatening medical negligence. Yet, despite many Republicans sharing these concerns, the bill never made it out of committee.
Around that same time, the Massachusetts state legislature responded to the public outcry surrounding the Steward bankruptcy by successfully advancing new legislation that landed on the governor’s desk by year’s end. Drawing on many of the same provisions as the Congressional bill, the state policy increased government oversight of corporate investors in healthcare markets, and explicitly prohibited many of the extractive practices used at Steward.
The tale of these two bills from Massachusetts’ lawmakers reflects the growing use of state governments to regulate the behaviors of private equity investors in ways that limit their effects on individuals and local communities. In addition to Congress’s long-running inability to overcome obstruction by this powerful industry, state action is also timely given recent court decisions that overturned Biden administration attempts to increase federal oversight into the finances and acquisition tactics of these funds.
In sectors from housing to healthcare to fire departments and beyond, private equity has become a symbol for the type of investor who buys companies with the primary aim of extracting as much money from them as possible, even at the expense of customers, workers, suppliers, and the viability of the company itself. Although not all private equity acquisitions are harmful, the private equity business model tends to prioritize short-term profits over other public objectives.
The Massachusetts healthcare bill, H.5159, is an example of how states can eliminate much of the ability of executives and investors to engage in harmful profit extraction even when the federal government fails. According to the Private Equity Stakeholder Project, 25 states have introduced bills to address the risks of private equity in healthcare, with this industry often serving as a model for how to regulate institutional investors in other sectors, like housing.
State action is particularly important in publicly funded sectors where state governments establish local terms of business for federal programs like Medicaid or Medicare. Control over the disbursement of public money gives state government an array of options for how to shape corporate behavior and structure markets. For example, H.5159 extended liability for when a healthcare company submits a false claim for public funding, to company owners and significant equity investors. Similarly, in 2025, Massachusetts placed a cap on the share of public money that could go to any single large for-profit child care provider in order to limit consolidation in that sector.
Another state-level tool for countering private equity’s growing reach is the ongoing revival by states attorneys general of their antitrust authorities, as well as a number of efforts by legislators to strengthen state antitrust laws. The laws can be used to target serial acquisitions and other monopolistic practices commonly used by private equity to expand into markets served by independent businesses, like doctors’ practices or veterinary clinics.
Compared to federal authorities, state competition enforcers are better placed to identify the potential harms such roll-ups can have on local markets and communities, even when these impacts are too small to register on national market statistics. In 2024, for example, the Colorado attorney general broke a private equity-owned anesthesiology chain’s monopoly over the Denver and Durango hospital markets—which had driven up prices for local patients. They also forced the company to dissolve its non-compete restrictions on local doctors. Proposed antitrust reforms in other states requiring companies to disclose acquisitions to local authorities stand to strengthen state authorities’ ability to monitor private equity’s impact on local markets, and to follow Colorado’s lead in acting on it.
Another way state governments are countering private equity is by expanding support for small businesses and local entrepreneurs. In 2022, California’s Employee Ownership Act was the latest in a string of state efforts to provide technical support and funding to help local workers and entrepreneurs take over existing businesses in their communities. Although such initiative are rarely explicitly viewed as part of a strategy to check private equity power, they remain essential for ensuring that independent businesses can compete with private equity-backed companies, and that communities retain control over the value of their local economy.
OMI Executive Director Barry Lynn Speaks at Top German Antitrust Conference on Power and Democracy
Open Markets Executive Director Barry Lynn spoke in the culminating session at the 23rd International Conference on Competition (IKK) in Berlin in March on the intersection of power, competition policy, and democracy. Lynn warned of the rapidly growing threat of autocracy posed by the dominant online communications corporations and encouraged the regulators and business leaders in the room to recognize their duty to protect democracy. Other leading speakers included European Commission Executive Vice President Teresa Ribera, Airbus Chairman Rene Obermann, Deutsche Telekom CEO Timotheus Höttges, and Omeed A. Assefi, Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice. The conference was hosted by Andreas Mundt, president of Bundeskartellamt, Germany’s competition authority.
Open Markets Submits Testimony on Illinois Bill Banning Non-Competes for All Workers
Open Markets Institute submitted testimony in support of the Illinois House Bill 3213 to ban non-compete clauses for all workers in the state, calling it a critical step toward protecting worker freedom, boosting wages, and promoting fair competition. “Making non-competes illegal—and backing this prohibition with effective legal sanctions—is essential for deterring employers from using these contracts and thereby protecting workers’ freedom to switch jobs or to start their own businesses,” OMI legal director Sandeep Vaheesan wrote in testimony submitted to the Illinois House Labor & Commerce Committee. Vaheesan has spearheaded the issue of non-competes since 2019, when Open Markets Institute led a coalition of civil society organizations, labor unions, legal experts, and economists that formally petitioned the Federal Trade Commission to use its authority under the FTC Act to issue a rule prohibiting non-compete clauses in labor contracts as an unfair method of competition that is per se illegal. Read the full letter here.
📝 WHAT WE'VE BEEN UP TO:
Bloomberg Law published an article by Open Markets legal director Sandeep Vaheesan arguing that despite the Trump administration’s abandonment of antitrust enforcement, exemplified by the the ouster of Gail Slater at the Department of Justice, states as well as other actors can pick up the mantle. “The executive branch is only one of several players involved in US antitrust enforcement,” he wrote. “The others—state attorneys general, consumers, workers, and independent businesses—will continue the fight against the abuse of corporate power.”
Courtney Radsch, the director of Center for Journalism & Liberty at Open Markets spoke at an event in Paris hosted by Sciences Po on information integrity and the future of journalism. In her remarks, Radsch discussed how the French G7 presidency could address challenges related to platform power, AI, and maintaining democratic information ecosystems.
Open Markets Institute Europe director Max von Thun spoke at a webinar organized by The Good Lobby and the Future Narratives Lab, which explored how civil society can challenge the dominant narratives that are fueling Europe’s deregulatory wave and highlighted the importance of taking back and redefining terms such as “innovation” and “simplification” that have been captured by corporate interests. Von Thun proposed alternative narratives including strengthening digital sovereignty, ensuring resilience and protecting democracy.
Tara Pincock, policy counsel for the Open Markets Institute, participated on a virtual panel, entitled “The Meta Monopoly Decision and its Implications for Antitrust,” hosted by the DC Bar Antitrust & Consumer Protection Community.
OMI senior legal analyst Daniel Hanley gave a talk at Harvard Law School on the importance of antitrust law and how it is foundational to our country’s economic and political liberty.
Open Markets chief Economist Brian Callaci gave a talk on his forthcoming book Chains of Command: The Rise and Cruel Reign of the Franchise Economy at Duke University Law School, engaging in a lively discussion with faculty and students.
🔊 ANTI-MONOPOLY RISING:
More than two dozen state attorneys general rejected a proposed Justice Department settlement with Live Nation, opting to continue pursuing antitrust litigation and potential structural remedies, including breaking up wholly owned Ticketmaster, in a bid to more fully address monopoly power in the live events industry. (Politico)
Arizona filed criminal charges against prediction market platform Kalshi for allegedly operating an illegal gambling business, marking the first criminal enforcement action against such platforms and escalating efforts by states to assert authority over emerging digital betting markets. (Reuters)
Canadian antitrust enforcers are moving forward with an investigation into Google’s dominance of digital advertising technologies after the Competition Tribunal dismissed the tech giant’s constitutional challenge. Canada will therefore join the EU and US in bringing ad tech cases against Google. (Competition Bureau Canada)
📈 VITAL STAT:
$27 Billion
The amount Meta will pay over the next five years for access to cutting-edge artificial intelligence infrastructure from Netherlands-based cloud provider Nebius Group as it spends aggressively to compete with the industry’s top AI models. (Bloomberg Law)
📚 WHAT WE'RE READING:
The Looming Taiwan Chip Disaster That Silicon Valley Has Long Ignored: The New York Times writes about how China’s saber-rattling over Taiwan poses a dire threat to the economy since 90 percent of the world’s high-end computer chips are manufactured in Taiwan. A 2022 report by the Semiconductor Industry Association revealed that cutting the supply of chips from Taiwan would lead to the largest economic crisis since the Great Depression, with U.S. economic output falling 11 percent, twice as much as the 2008 recession. Open Markets executive director Barry Lynn flagged this concern two decades ago in his book End of the Line: The Rise and Coming Fall of the Global Corporation.