U.S. Antitrust Agencies Issue Guidance for Businesses Looking to Cooperate in Fighting COVID-19 Pandemic
On March 24, 2020, the Federal Trade Commission and the U.S. Department of Justice Antitrust Division issued a joint statement detailing an expedited antitrust review procedure and providing guidance to businesses looking to cooperate in the fight against the COVID-19 pandemic. The expedited review is limited to requests for approvals for temporary collaborations in response to the pandemic and does not apply to mergers, however.
The statement recognizes the unprecedented cooperation between federal, state, and local governments and among private businesses required to address the spread of COVID-19. For example, the agencies note that health care facilities may need to work together in providing resources and services to communities without immediate access to protective equipment, medical supplies, or health care. Businesses may need to temporarily combine production, distribution, or service networks to facilitate production and distribution of COVID-19-related supplies.
“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,” the agencies emphasized in the statement.
Under the expedited procedure, the agencies will aim to respond to COVID-19-related requests within seven calendar days of receiving all necessary information. This expedited procedure offers a significantly quicker review than the existing procedures for evaluation of proposed conduct under the Division’s Business Review Process or the FTC’s Advisory Opinion Process, which typically take several months.
Requests should be submitted by email to the Bureau of Competition at [email protected]. A request must explain how it is related to COVID-19 and provide a description of the nature and rationale of the proposal, any proposed contractual or other arrangements among the parties, the names of the major expected customers, and any available information regarding the competitive significance of other providers of the products or services to be offered.
The agencies also announced that they will work to expeditiously process filings under the National Cooperative Research and Production Act for flexible treatment of certain standard development organizations and joint ventures which “may be necessary for businesses to bring goods to communities in need, to expand existing capacity, or to develop new products or services.”
The joint statement also reminds businesses that there are many ways that firms, including competitors, can engage in procompetitive collaboration that does not violate the antitrust laws. For example, the Federal Trade Commission & U.S. Department of Justice, Antitrust Guidelines for Collaborations Among Competitors (2000) and Statement of Antitrust Enforcement Policy in Health Care (1996) provide guidance as to how the agencies analyze cooperation and collaboration between competitors.
The agencies warn that they will not hesitate to hold accountable those who try to use the pandemic to engage in antitrust violations, and stand ready to pursue civil violations of the antitrust laws, including agreements 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. The Division will also 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.
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