On March 24, 2020, the Antitrust Division of the Department of Justice and the Bureau of Competition of the Federal Trade Commission issued a joint statement acknowledging that individuals and businesses are quickly working to respond to the COVID-19 national emergency. As communities continue to come together, businesses considering joining forces with competitors to respond to COVID-19 will be able to quickly receive agency guidance on compliance with antitrust laws. But the agencies also warned businesses against using the crisis as an opportunity to subvert competition or take advantage of vulnerable individuals.
The joint statement highlighted that companies applying through the DOJ’s Business Review Process and the FTC’s Advisory Opinion Process during this critical time will now receive a response, after the agency receives all necessary information, within seven calendar days. This rapid response also extends to expeditiously processing joint venture filings under the National Cooperative Research and Production Act (as amended by the Standards Development Organization Advancement Act).
The DOJ and FTC explained that joint efforts to provide Americans with products or services that are otherwise unavailable may be a necessary response to exigent circumstances in fighting COVID-19. This includes healthcare facilities that provide resources such as personal protective equipment and medical supplies, and other businesses temporarily producing COVID-19-related supplies that the businesses may not have traditionally manufactured or distributed.
The agencies acknowledged that many types of collaborations among competitors do not present significant concerns under the antitrust laws and can be undertaken immediately with no need to seek sign-off from the DOJ or FTC. Some examples cited in the joint statement include:
- collaborations on research and development of an “efficiency-enhancing integration of economic activity”;
- sharing technical know-how, as opposed to company-specific data about prices, wages, outputs or costs;
- healthcare providers developing suggested practice parameters, such as “standards for patient management developed to assist providers in clinical decision making” that may provide useful information to patients, providers and purchasers; and
- joint purchasing arrangements among healthcare providers designed to “increase the efficiency of procurement and reduce transaction costs.”
For businesses taking advantage of the COVID-19 crisis to subvert competition, the DOJ stands ready to prosecute criminal violations of the antitrust laws, such as horizontal agreements regarding price, bids, allocation of customers or markets and employment matters, and both agencies remain vigilant and prepared to pursue civil violations of the antitrust laws.
McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial coronavirus-related business and legal issues, and the firm’s COVID-19 response team stands ready to help clients navigate urgent and evolving legal and business issues arising from the COVID-19 pandemic.