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Federal Antitrust Agencies Open Door for More Business Cooperation Amid Coronavirus Pandemic

    Client Alerts
  • April 03, 2020

The federal antitrust enforcement agencies have committed to providing businesses expeditious guidance about how and whether their efforts to address the coronavirus pandemic comply with federal antitrust laws.

On March 24, the Federal Trade Commission and the Antitrust Division of the United States Department of Justice issued a statement acknowledging that addressing the pandemic “will require unprecedented cooperation between federal, state and local governments and among private businesses to protect Americans’ health and safety.”  In light of this, the agencies are committing to respond within a week to organizations looking for clearance to cooperate, including in the treatment of patients, the production of medical products, and the distribution of supplies.

That said, the agencies have made clear that the federal antitrust laws still apply – the existence of the COVID-19 pandemic does not excuse the need for businesses and individuals to follow the law. Indeed, the agencies pointed out that enforcement of the federal antitrust laws may be particularly relevant at this time to prevent unscrupulous behavior that seeks to substantially lessen  competition or prey on vulnerable Americans.

In addition, the agencies pointed out that – consistent with their prior guidance – there are many ways that businesses, including competitors, can collaborate to address the pandemic that do not violate the antitrust laws. For example, these collaborative activities might include:

  • Joint research and development.
     
  • Joint purchasing arrangements, such as those that reduce transaction costs.
     
  • Joint development of practice parameters, such as patient management standards or protocols developed to assist providers in clinical decision-making.
     
  • The sharing of technical know-how or other information that is not competitively sensitive, or is “blinded” so as to lessen the risk of anticompetitive effects.
     
  • Joint lobbying.

In short, any of these types of activities designed to address the COVID-19 pandemic are still permissible.

Nonetheless, the agencies recognize that there may still be a need for businesses to obtain additional guidance on an expedited basis, separate from the agencies’ standard procedures that generally take several months.  Accordingly, each agency has established a temporary expedited process by which it will seek to respond to requests addressing the COVID-19 pandemic within seven calendar days of receipt of all necessary information. Of note, the request must explain how the proposal is related to COVID-19 in order to be afforded expedited review. The agency’s response will be in effect for one year, with further expedited reviews permitted if necessary.

The agencies assured that they will account for exigent circumstances in evaluating efforts to address the spread of COVID-19 and its aftermath. For example, the agencies acknowledged that health care facilities may need to work together to provide resources and services to communities without immediate access to health care or necessary equipment or supplies. Likewise, other businesses may need to combine product, distribution, or service networks temporarily to facilitate the production and distribution of COVID-19 related supplies they may not have traditionally manufactured or distributed. The agencies noted: “These sorts of joint efforts, 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.”

For more information, please contact us or your regular Parker Poe contact. You can also find the firm’s other COVID-19 alerts here.