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Federal Trade Commission and Justice Department Release Joint Antitrust Guidance for COVID-19 Public Health Efforts

As the COVID-19 pandemic continues to spread, so too have concerns about collaboration between competitors attempting to address unmet needs due to this national emergency. Shortages of medical supplies, personal protective equipment (PPE), and health care services pose questions of whether stakeholders can join forces in order to provide these much needed services and supplies. Undoubtedly hearing these concerns, the Federal Trade Commission and the U.S. Department of Justice Antitrust Division (the “Agencies”) issued a joint statement providing guidance for business collaboration related to COVID-19. At base, the Agencies sent a message—antitrust laws should not be an impediment to competitor collaboration in addressing challenges faced from the novel coronavirus.

Agencies’ Expedited Procedure for Review of Competition Concerns

The joint statement provides that the Agencies will aim to respond to all COVID-19-related requests and to resolve those addressing public health and safety within seven (7) calendar days of receiving all necessary information. This expedited review process includes the FTC’s Staff Advisory Opinion procedure as well as the DOJ’s Business Review Letter procedure. The FTC has also established a separate email address for submission of requests for FTC staff advisory opinions given the volume and urgency of responding to concerns, [email protected]. A request for an expedited staff opinion must include the following:

  • An explanation of how the request is related to COVID-19;
  • A description of the nature and rationale of the proposal (including the names of the participants, the product(s) or service(s) the proposal will cover, and the temporal and geographic scope of the arrangement);
  • Any proposed contractual or other arrangements among the parties (including copies of any documents memorializing the contract or arrangement);
  • The names of the major expected customers;
  • Any available information regarding the competitive significance of other providers of the product(s) or service(s) to be offered;
  • The name and contact information of a person whom staff can contact for additional information.

The FTC’s responses will be in effect for one (1) year from the date of the response. To the extent the anticipated conduct relating to COVID-19 extends beyond one year, Parties may subsequently request via the same expedited procedures that the agency reiterate its intention not to challenge the conduct.

In addition to responding to requests, the Agencies will also endeavor to “expeditiously process” filings under the National Cooperative Research and Production Act. The NCRPA is a 1993 law that limits potential antitrust liability to actual damages[1]/ should a violation of antitrust law occur in the process of carrying out a joint venture (JV) or participation in a standards development organization (SDO). Making a filing under this law allows companies to notify the government of their involvement in a JV or SDO, and particularly in times of uncertainty such as this, preserving a limitation of liability can be useful.

Collaboration with Competitors: Allowed and Encouraged, Particularly in Times of Crisis

The FTC and DOJ reiterated longstanding law, that there are often pro-competitive reasons for competitors to share information. While information exchange with competitors should typically be vetted by antitrust counsel, the exchange of information in and of itself is not per se anticompetitive. The Agencies highlighted the following salient points for pro-competitive information sharing:

  • Collaboration on research and development is “typically procompetitive.”[2]/
  • Exchange of “technical know-how,” rather than company-specific data about prices, wages, outputs, or costs, may be necessary.[3]/
  • The Agencies will not ordinarily challenge providers’ development of standards for patient management developed to assist providers in clinical decision-making that may provide useful information to patients, providers and purchasers.[4]/
  • Most joint purchasing agreements among healthcare providers do not raise antitrust concerns.[5]/
  • Under the Noerr-Pennington doctrine, parties are generally free to lobby, and may convene meetings with the federal government, to discuss the use of federal funds, so long as those lobbying activities are merely solicitation of governmental action. Parties may therefore lobby regarding response strategies related to COVID-19.

The Agencies further identified situations in which competitors may need to communicate while responding to this global pandemic. Such examples included (1) health care facility coordination in providing resources and services to communities without access to PPE, medical supplies, or health care; or (2) manufacturers temporarily combining production, distribution, or service networks to facilitate production/distribution of COVID-19-related supplies. So long as these joint efforts are limited in duration and necessary for the assistance of patients affected by the novel coronavirus, such efforts may be a necessary response to these exigent circumstances.

Of course, price-fixing is per se illegal under §1 of the Sherman Act, and in the course of information exchange, companies should carefully evaluate whether agreements with competitors related to COVID-19 activities implicate product pricing, employment policies, or manufacturing policies, or other areas that could still merit federal enforcement attention. For more information, the Agencies also referenced the FTC and DOJ’s Antitrust Guidelines for Collaborations Among Competitors and its 1996 Statement of Antitrust Enforcement Policy in Health Care, which are integral resources to those involved in inter-company collaboration.

Feel free to contact any of the attorneys listed above for further information on this, or any antitrust or competition law questions. We would be pleased to assist you with any concerns you may have.

 

[1]/As compared to treble damages provided for by the Sherman Act, 15 U.S.C. §§ 1-7.

[2]/See Federal Trade Comm’n & U.S. Dep’t of Justice, Antitrust Guidelines for Collaborations Among Competitors at 31 (2000).

[3]/Id. at 15.

[4]/See Federal Trade Comm’n & U.S. Dep’t of Justice, Statement of Antitrust Enforcement Policy in Health Care at 41 (1996).

[5]/Id. at 53.

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Authors

Bruce D. Sokler

Member / Co-chair, Antitrust Practice

Bruce D. Sokler is a Mintz antitrust attorney. His antitrust experience includes litigation, class actions, government merger reviews and investigations, and cartel-related issues. Bruce focuses on the health care, communications, and retail industries, from start-ups to Fortune 100 companies.

Joseph M. Miller

Member / Co-chair, Antitrust Practice

Joseph M. Miller is Co-chair of Mintz’s Antitrust Practice. He draws on in-house, law firm, and government experience to advise clients on transactions, government investigations, and merger reviews.

Shawn N. Skolky

Associate

Shawn Skolky is a Mintz Associate who advises clients on antitrust and competition law, including antitrust counseling, merger review, and private antitrust litigation. Shawn's consumer product safety practice assists companies with product safety reporting, recalls, and regulatory compliance.