By Arnall Golden Gregory LLP
Given the extraordinary measures necessary to address the COVID-19 crisis, many businesses find themselves with opportunities to collaborate with competitors in a joint effort to meet global demand for essential products and services, including medical supplies and equipment. The Department of Justice, the Federal Trade Commission and State Attorney Generals have provided public guidance as they have modified their positions, to some extent, on antitrust enforcement. However, it is essential that businesses remain aware of the continued enforcement of antitrust laws in the United States, despite the current pandemic. While government agencies are encouraging cooperation on limited issues directly related to fighting the pandemic, longstanding prohibitions on anticompetitive practices largely remain in full force and effect with limited exceptions.
On March 24, 2020, the Antitrust Division of the Department of Justice and the Federal Trade Commission’s Bureau of Competition (collectively “the Agencies”) provided guidance on antitrust enforcement during the pandemic through a joint statement. This statement clarified mechanisms for pro-competitive collaboration and instituted an expedited review process for COVID-19 related requests.[1] The accelerated review of such requests includes applications under the National Cooperative Research and Production Act, which allows for flexible treatment of certain organizations and joint ventures under antitrust laws, as well as the ability to obtain antitrust guidance from the Bureau of Competition by submitting written requests via email to FTCCOVID19@ftc.gov.
Although the joint statement does not include express exceptions to existing antitrust laws, it does state that the Agencies will consider “exigent circumstances” when reviewing efforts by businesses to respond to the COVID-19 pandemic. For example, the Agencies indicate that leeway may be provided where businesses “temporarily combine production, distribution, or service networks to facilitate production and distribution of COVID-19 related supplies they may not have traditionally manufactured or distributed.” Similarly, in an effort to provide immediate guidance to businesses, the joint statement lists a variety of arrangements and coordination considered unlikely to trigger antitrust violations, including:
- Collaboration between businesses on research and development in accordance with the Guidelines for Collaborations Among Competitors;[2]
- Exchanging technical know-how while excluding company-specific data regarding prices, wages, outputs, or costs;
- The development of “suggested practice parameters” for patient management that may be helpful for patients, providers, and purchasers;
- Joint purchasing arrangements among healthcare providers; and
- Private lobbying intended to solicit government action.
Given the trillions of dollars to be injected into the United States economy through the CARES Act and other stimulus legislation, the overwhelming need for products and services to address the impact of the pandemic, and the uncertain treatment of potentially anticompetitive activities necessary to address that need, it is likely that substantial antitrust and other regulatory enforcement action will be taken in the coming months.
