Legal Definitions - market-participant doctrine

The market-participant doctrine is a principle that states that a state does not discriminate against interstate commerce by participating in the market as a buyer or seller, operating a proprietary enterprise, or subsidizing private business. This means that if a state is participating in the market instead of regulating it, the Dormant Commerce Clause analysis does not apply, and the state activity will generally stand.

For example, if a state government decides to purchase goods from a private company, it is acting as a market participant. In this case, the state is not regulating the market, but rather participating in it as a buyer. Therefore, the market-participant doctrine would apply, and the state's activity would generally be allowed.

Another example is if a state government operates a business that competes with private companies. As long as the state is participating in the market as a seller, the market-participant doctrine would apply, and the state's activity would generally be allowed.