FTC and DOJ Issue Joint Statement Providing Antitrust Guidance on COVID-19 Public Health Efforts

March 27, 2020
Firm Publication

The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) (collectively, the Agencies) have announced in a Joint Statement how they will view cooperative efforts among competing healthcare providers and businesses in other sectors that work together to address public health and safety concerns related to the COVID-19 pandemic.

The Joint Statement, issued March 24, includes the following:

  • Establishes expedited evaluations of proposed conduct through the DOJ business review letter and FTC advisory opinion procedures.
  • Provides guidance to those who need to act immediately during the pandemic by giving examples of the types of collaborative conduct that are generally considered acceptable under antitrust law.
  • Explains when the Agencies will consider “exigent circumstances” when reviewing conduct.
  • Provides an expedited procedure for filings under the National Cooperative Research and Production Act (as amended by the Standards Development Organization Advancement Act).

The Joint Statement also emphasizes that the Agencies will continue to enforce the antitrust laws against violators when circumstances warrant.

1. Expedited Agency Evaluations

The DOJ’s Business Review Process and the FTC’s Advisory Opinion Process provide ways for individuals and businesses to request the Agencies to evaluate whether their proposed conduct would violate the antitrust laws. These processes usually take several months to complete.  The Joint Statement has announced that the Agencies will aim to respond “expeditiously” to all COVID-19-related requests from individuals and businesses seeking guidance about how to ensure their efforts comply with federal antitrust laws. The Agencies will aim to resolve such requests addressing public health and safety within seven days of receiving all necessary information.

Information concerning the procedure for obtaining an FTC Advisory Opinion is outlined here. Information on requesting a DOJ Business Review Letter is available here.

2. Examples of Acceptable Collaborative Conduct

The joint statement provides further guidance for individuals and businesses whose response to COVID-19 requires immediate action by identifying examples of collaborative activities designed to improve the health and safety response to the pandemic that generally would be consistent with the antitrust laws. These examples include:

  • Collaboration among firms on research and development.
  • Sharing “technical know-how,” rather than company-specific data including prices, wages, outputs, or costs.
  • Development of suggested standards for patient management (developed to assist providers in clinical decision-making) that also may provide useful information to patients, providers and purchasers.
  • Lobbying focused on the use of federal emergency authority, including private industry meetings with the federal government to discuss strategies on responding to COVID-19, so long as those activities are “mere solicitation of governmental action with respect to the passage and enforcement of laws.”
  • Certain joint purchasing arrangements among healthcare providers, such as those designed to increase the efficiency of procurement and reduce transaction costs.

3. Consideration of “Exigent Circumstances”

The Agencies recognize that certain joint efforts that are “limited in duration and necessary to assist patients, consumers, and communities affected by COVID-19 and its aftermath[] may be a necessary response to exigent circumstances that provide Americans with products or services that might not be available otherwise.”

The Agencies announced that they will account for such “exigent circumstances” when evaluating efforts to address the COVID-19 pandemic.

Examples of the types of efforts that the Agencies will evaluate in light of the exigent circumstances include:

  • Cooperation among healthcare facilities and other businesses to provide resources and services to communities without immediate access to personal protective equipment, medical supplies, or healthcare.
  • Businesses temporarily combining production, distribution or service networks to facilitate production and distribution of COVID‑19-related supplies not traditionally manufactured or distributed by those businesses.

4. Expedited NCRPA/SDOAA Filing Procedure

The National Cooperative Research and Production Act (NCRPA) (as amended by the Standards Development Organization Advancement Act) provides for flexible treatment under antitrust laws for certain standards development organizations and joint ventures. The Agencies recognize that certain joint ventures may be necessary to address COVID-19, such as cooperation to provide goods to communities, expand existing capacity, or develop new products and services. To that end, the Agencies will “expeditiously” process filings made under the NCRPA. More information about filing a notification under the NCRPA is available here.

5. Continued Antitrust Enforcement

The joint statement includes strong words for those who might use COVID-19 “as an opportunity to subvert competition or prey on vulnerable Americans.” The Agencies admonished that they would not hesitate to hold such individuals and businesses accountable. Accordingly, parties must be mindful of activities that may result in civil enforcement of the antitrust laws, such as agreements between individuals and/or businesses to restrain competition through increased prices, lower wages, decreased output, or reduced quality as well as efforts by monopolists to use their market power to engage in exclusionary conduct. In addition, the DOJ will 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.

Conclusion

The Joint Statement is welcome news for individuals and businesses, including healthcare providers, needing to collaborate with competitors in addressing the COVID-19 pandemic. Nonetheless, laws governing cooperation among competitors, and the antitrust laws generally, are complex and replete with nuance. Parties needing to engage in joint activities with their competitors under any circumstances should seek the advice of antitrust counsel before doing so. If you have any questions about how the Joint Statement may impact your business, please contact the authors of this alert.