On March 24, 2020, the Department of Justice (DOJ) and Federal Trade Commission (FTC) issued a joint statement on COVID-19-related antitrust enforcement highlighting ways “firms, including competitors, can engage in procompetitive collaboration that does not violate the antitrust laws” to protect public health and safety. The DOJ and FTC emphasized their commitment to facilitating antitrust compliance for businesses that are responding to the national emergency. In furtherance of this position, the agencies gave examples of collaborative activities designed to improve health and safety during the COVID-19 pandemic that are unlikely to run afoul of the antitrust laws, absent exceptions. These include:
- Collaboration on research and development as “efficiency-enhancing integration of economic activity” which is typically procompetitive.
- Sharing technical know-how – rather than company specific data about prices, wages, outputs, or costs – as necessary to achieve procompetitive benefits of collaboration.
- The “development of suggested practice parameters – standards for patient management developed to assist providers in clinical decisionmaking” by providers will not be challenged except in extraordinary circumstances.
- Joint purchasing arrangements among health care providers “designed to increase the efficiency of procurement and reduce transaction costs.”
- “[P]rivate lobbying addressed to the use of federal emergency authority, including private industry meetings with the federal government to discuss strategies on responding to COVID-19, insofar as those activities comprise mere solicitation of governmental action with respect to the passage and enforcement of laws.”
The DOJ and FTC directed businesses to the 2000 Antitrust Guidelines for Collaborations Among Competitors and the 1996 Statement of Antitrust Enforcement Policy in Health Care for explanations on how they analyze cooperation and collaboration between competitors under the antitrust laws generally.
Moreover, the DOJ and FTC indicated they will “account for exigent circumstances in evaluating efforts to address the spread of COVID-19 and its aftermath.” Examples of arrangements that could qualify due to the exigent circumstances of COVID-19 identified by the agencies include:
- Health care facilities working together to provide resources to communities that do not have access to personal protective equipment, medical supplies, or health care.
- Businesses temporarily combining production, distribution, or service networks to provide COVID-19-related supplies they may not have traditionally supplied.
The agencies noted: “These sorts of joint efforts, limited in duration and necessary to assist patients, consumers, and communities affected by COVID-19 and its aftermath, may be a necessary response to exigent circumstances that provide Americans with products or services that might not be available otherwise.” The agencies cautioned, however, that they will not “hesitate to seek to hold accountable those” individuals and business who attempt to use COVID-19 to “subvert competition or prey on vulnerable Americans.”
The DOJ Antitrust Division and FTC also committed to an expedited 7-day response time to COVID-19-related requests under their respective Business Review and Advisory Opinion processes, which typically take months. DOJ Business Review requests should be submitted in writing via email to ATR.COVID19@USDOJ.GOV (further instructions available here). FTC Advisory Opinion requests should be submitted in writing via email to FTCCOVID19@ftc.gov (further instructions available here).
This post was co-authored by Michael Lisitano, legal intern at Robinson+Cole. Michael is not yet admitted to practice law.