March 26, 2020
While COVID-19 affects every segment of daily life both personal and professional, it is easy to forget antitrust law and the risks associated with competitor contacts in this time of crisis.
The Department of Justice and the Federal Trade Commission recently unveiled an expedited review process for business collaborations working to protect Americans’ health and safety.1 The agencies recognize that procompetitive collaboration among businesses providing health and safety-related services will be helpful and even necessary to address the pandemic’s ever-increasing strain on consumers. Procompetitive activity includes research and development, sharing technical—rather than company-specific—information, creating practice parameters to assist providers in clinical decisionmaking, entering into joint purchase agreements among health care providers to gain efficiencies and/or lower prices, and lobbying for the use of federal emergency authority. Further, the agencies will account for the exigent circumstances in evaluating efforts to stop or ameliorate COVID-19’s effects by offering an expedited business review process. A business seeking guidance on its coronavirus-related public health efforts under the expedited process may expect a response within seven days of submitting a written proposal.2
But even during a pandemic, antitrust law remains in full effect. Antitrust risks are present in all industries, across all markets and with businesses of all sizes. The agencies’ statement included a reminder that not all collaboration is well-intended or procompetitive, and all companies, regardless of industry, need to stay alert to avoid antitrust pitfalls. Agreements among competitors to fix prices, allocate markets and rig bids are per se illegal and prosecuted criminally in the United States. And in October 2016, the agencies put companies on notice that they would view no-poach and wage-fixing agreements as problematic and potentially criminal. Agreements that do not rise to the criminal level can still be unlawful if their intended or likely effect will produce anticompetitive effects in the market like output restrictions or higher prices to consumers.
Here are six antitrust pitfalls to avoid that may not be evident during these unprecedented times:
Businesses—particularly those providing materials and services related to the health crisis—should remain mindful of antitrust risks in spite of the crisis, and Hunton Andrews Kurth LLP’s antitrust team is poised to answer any compliance-related questions.
Notes
1. Joint Statement, Federal Trade Commission and Department of Justice, “Joint Antitrust Statement Regarding COVID-19” (March 24, 2020).
2. Id. This process mirrors the FTC’s “Staff Advisory Opinion” procedure and DOJ’s “Business Review Letter” procedure and is a quicker form of review.