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Businesses in various industries, particularly healthcare, are considering ways to work together in responding to the crisis caused by COVID-19 in the United States. Although cooperative efforts among competitors merit antitrust consideration, competing businesses can often collaborate in a procompetitive manner that poses minimal, if any, antitrust risk. In this vein, the recent Joint Antitrust Statement Regarding COVID-19 (March 24, 2020) (the “Joint Statement”)1 issued by the Federal Trade Commission and the Antitrust Division of the Department of Justice (the “Agencies”) provides helpful procompetitive guidance for businesses exploring collaborative projects focused on dealing with the COVID-19 threat.
In the Joint Statement, the Agencies explicitly recognize that businesses may need to act rapidly to address the public health and economic concerns raised by COVID-19. The Agencies also acknowledge that numerous collaborative activities designed to improve the health and safety response to COVID-19 are in accordance with the antitrust laws, and may indeed be procompetitive. Such activities include the following:
- Research and Development Collaboration. Efforts aimed at developing new products or services to treat COVID-19.
- Sharing Technical Know-How. Only know-how and not prices, costs, output or wages.
- Developing of Suggested Practice Parameters. New practice parameters are critical for managing COVID-19, like standards for patient management, clinical decision making, and personal protective equipment (“PPE”) purchasing.
- Joint Purchasing, Production or Distribution Arrangements. For example, joint arrangements to improve procurement and reduce transaction costs.
The Joint Statement also advises interested businesses to review previous statements of the Agencies that explain how they analyze cooperation and collaboration between competitors.2 Additionally, the Joint Statement announces several related considerations regarding collaboration and enforcement in the COVID-19 context.
First, in evaluating efforts to combat COVID-19, the Agencies will account for exigent circumstances. As an example, the Joint Statement notes that health care facilities may need to unite in providing resources and services to communities without immediate access to PPE, medical supplies, or health care. Likewise, other businesses may need to combine production, distribution, or service networks temporarily in order to facilitate production and distribution of COVID-19 supplies that they may not have typically manufactured or distributed. Such joint efforts, limited in time, may constitute necessary responses to the exigent circumstances associated with COVID-19.
Second, to the extent that the federal government seeks help from private businesses in addressing COVID-19, the Agencies will work with the Department of Health and Human Services to implement provisions of the Defense Production Act and the Pandemic and All-Hazards Preparedness Act, as appropriate. The Agencies also expressed a willingness to assist other agencies working to address COVID-19.
Finally, the DOJ’s Business Review Process and the FTC’s Advisory Opinion Process, both of which provide mechanisms for businesses to ask the DOJ and FTC to assess proposed conduct, will strive to respond expeditiously to all COVID-19-related requests. In the normal course, those processes can last for several months, but now the Agencies will attempt to resolve requests addressing public health and safety within seven (7) calendar days of receiving all necessary information.
Because joint ventures may prove useful in bringing needed goods to communities, expanding existing capacity, or developing new products and services, the Agencies will also work quickly to process filings under the National Cooperative Research and Production Act (as amended by the Standards Development Organization Advancement Act). These two laws provide flexible antitrust treatment for certain standards development organizations and joint ventures.
The Joint Statement offers valuable guidance for businesses acting in concert with others, including competitors, to fight COVID-19. Your regular Locke Lord contact and the authors of this article would be happy to help you navigate the Joint Statement and related guidance as it applies to your business.
Please visit our COVID-19 Resource Center often for up-to-date information to help stay informed of the legal issues related to COVID-19.
1. See Federal Trade Comm’n & U.S. Dep’t of Justice, Joint Antitrust Statement Regarding COVID-19 (Mar. 24, 2020).
2. See Federal Trade Comm’n & U.S. Dep’t of Justice, Antitrust Guidelines for Collaborations Among Competitors (2000) and Statement of Antitrust Enforcement Policy in Health Care (1996).