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U.S. Antitrust Agencies’ COVID-19 Response: Requests for Health and Safety Cooperation

This Alert is brought to you by AHLA’s Antitrust Practice Group.
  • March 26, 2020
  • Vic Domen , Norton Rose Fulbright LLP
  • Amanda Wait , Norton Rose Fulbright LLP
  • Stacey Murphy , Norton Rose Fulbright LLP

Addressing the COVID-19 global pandemic “will require unprecedented cooperation between federal, state, and local governments and among private businesses to protect Americans’ health and safety.”[1] This cooperation may result in new and innovative ways to address public health and safety, but companies engaged in collaboration with competitors must be careful to avoid violations of federal antitrust law.
 
The Federal Trade Commission (FTC) and Department of Justice (DOJ) Antitrust Division issued a joint statement on March 24, 2020, detailing their plans to expedite the review of requests filed under the Antitrust Division’s Business Review Process, the FTC’s Advisory Opinion Process, and filings under the National Cooperative Research and Production Act and providing additional guidance to companies seeking to cooperate for health and safety purposes in response to the pandemic.
 

Key Changes to Agency Review Process

  • Expedited review time. The agencies committed to providing responses to these requests within seven calendar days after receiving all information necessary. This is a significant reduction in the “several months” the agencies said these reviews generally take.
  • Consideration of “exigent circumstances” due to COVID-19. The agencies also explained that they will take into account “exigent circumstances” such as the need for health care facilities to work together to provide COVID-19 response-related resources and services, such as that “businesses may need to temporarily combine production, distribution, or service networks.”
Furthermore, the agencies also made clear that joint efforts that may be helpful to respond to the pandemic are not granted a blanket exemption to the antitrust laws. These joint efforts must be “limited in duration and necessary to assist patients, consumers, and communities affected by COVID-19 and its aftermath.”
 

Remember: Antitrust Laws Still Apply

The agencies warned that they will continue to pursue antitrust law violations and “will not hesitate to seek to hold accountable” individuals and businesses who may use the pandemic “as an opportunity to subvert competition or prey on vulnerable Americans.”

Specifically, DOJ is “addressing actions by individuals and businesses to take advantage of COVID-19 through other fraudulent and illegal schemes” and “will also prosecute any criminal violations of the antitrust laws, which typically involve agreements or conspiracies between individuals or businesses to fix prices or wages, rig bids, or allocate markets.”
 

Examples of Collaborative Conduct Consistent with Federal Antitrust Laws

The agencies recognized that many health care-related collaboration activities likely are consistent with the federal antitrust laws and advanced agency reviews are not necessary to begin work unless the transactions otherwise require a Hart-Scott-Rodino (HSR) filing. The agencies outlined a number of examples of these types of collaborations that parties may need to act on immediately to address the developing pandemic, including:
  • Collaborating on research and development.
  • Sharing technical know-how (but not sharing company-specific pricing, wage, output or cost data, which sharing may violate federal antitrust law).
  • Joint development of suggested practice parameters.
  • Joint purchasing arrangements designed to increase procurement efficiency or reduce transactions costs.
  • Industry lobbying.
To avoid potential antitrust pitfalls, we urge companies to consult with experienced antitrust practitioners prior to undertaking any collaborations with competitors in response to COVID-19.
 

[1] Dep’t of Justice and Fed. Trade Comm’n, Joint Antitrust Statement Regarding COVID-19, Mar. 24, 2020, https://www.ftc.gov/system/files/documents/public_statements/1569593/statement_on_coronavirus_ftc-doj-3-24-20.pdf.