The agencies warned that they will not hesitate to hold accountable those who try to use the pandemic to engage in antitrust violations.
On March 24, 2020, recognizing the need to provide guidance for businesses collaborating to protect the health and safety of Americans during the COVID-19 pandemic, the Federal Trade Commission (FTC) and the U.S. Department of Justice Antitrust Division (DOJ) issued a joint statement detailing an expedited antitrust review procedure and providing guidance for such business collaborations.
Traditionally, both agencies have taken several months to evaluate proposed business conduct after receiving all necessary information. To address the rapidly evolving public health crisis as quickly as possible, however, the agencies are now aiming to expedite all COVID-19 related requests and to resolve requests involving public health and safety within just seven calendar days after receiving all necessary information. These efforts aim to help healthcare providers and other businesses temporarily work together to assist patients, consumers and communities affected by the pandemic and its aftermath by, for example, permitting collaboration to produce, distribute or create service networks to facilitate production and distribution of COVID-19-related supplies. The agencies are also seeking to expeditiously process filings under the National Cooperative Research and Production Act to allow joint ventures necessary for businesses to bring goods and services to communities in need, to expand existing capacity and to develop new products or services for public health and safety.
FTC Chairman Joe Simons stated, “Under these extraordinary circumstances, we understand that businesses collaborating on public health initiatives may need an expedited response from U.S. antitrust authorities.” Assistant Attorney General Makan Delrahim added, “The Antitrust Division recognizes the importance of providing expeditious clarity on any antitrust obligations in this challenging time.”
At the same time, the agencies warned that they will not hesitate to hold accountable those who try to use the pandemic to engage in antitrust violations, and that the Department of Justice will criminally prosecute conduct such as price fixing, bid-rigging or market allocation.
- Collaboration on research and development;
- Sharing of technical know-how;
- Providers’ development of suggested practice parameters―standards for patient management developed to assist providers in clinical decision-making―that also may provide useful information to patients, providers and purchasers;
- Joint-purchasing arrangements among healthcare providers, such as those designed to increase the efficiency of procurement and reduce transaction costs (subject to limitations on the percentage of market buyers and the percentage of overall costs of operations); and
- Lobbying for governmental action (subject to limitations recognized under the Noerr-Pennington doctrine and the state action doctrine).
The question of whether a business collaboration comports with U.S. antitrust laws depends on the facts and circumstances in each case and usually requires careful analysis. Businesses should seek experienced antitrust counsel to advise them on their proposed efforts. Outside the scope of the special COVID-19 procedures, businesses should seek evaluation via DOJ’s business review process and/or FTC’s advisory opinion process. Noncompliance with these processes could carry serious penalties, and businesses should seek experienced antitrust counsel to advise them on the process and to assist them in promptly collecting and providing all necessary information for the agencies as quickly as possible. The agencies’ new COVID-19 procedures allow for greater collaboration in response to the critical needs of this growing crisis.
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Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For Further Information
If you have any questions about this Alert, please contact Sean P. McConnell, Sean S. Zabaneh, Edward G. Biester III, any of the attorneys in our Antitrust and Competition Group, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.