The US Federal Trade Commission and the Antitrust Division of the US Department of Justice have announced that they aim to respond within one week to coronavirus (COVID-19) collaborative proposals submitted pursuant to the agencies’ respective processes.
In a joint statement issued March 24, the US Federal Trade Commission and the Antitrust Division of the US Department of Justice committed to an “expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and safety of Americans during the COVID-19 pandemic.”
Specifically, the agencies “are committed to providing individuals and businesses in any sector of the economy that are responding to this national emergency expeditious guidance about how to ensure their efforts comply with the federal antitrust laws” by aiming to respond within a week to COVID-19 collaborative proposals submitted pursuant to the Antitrust Division’s business review process and the Federal Trade Commission’s advisory opinion process—requests that typically can take several months to resolve.
The joint statement makes clear that responding to COVID-19 “will require unprecedented cooperation between federal, state, and local governments and among private businesses to protect Americans’ health and safety,” and emphasized that “there are many ways firms, including competitors, can engage in procompetitive collaboration that does not violate the antitrust laws.”
In addition to confirming their established guidelines for competitor collaborations, the agencies noted that they “will also account for exigent circumstances in evaluating efforts to address the spread of COVID-19 and its aftermath.” As examples, the agencies noted that “health care facilities may need to work together in providing resources and services to communities without immediate access to personal protective equipment, medical supplies, or health care,” and that “[o]ther businesses may need to temporarily combine production, distribution, or service networks to facilitate production and distribution of COVID-19-related supplies they may not have traditionally manufactured or distributed.”
The agencies’ joint statement comes on the heels of similar announcements made by antitrust officials around the globe, including a joint statement by the network of European competition authorities (ECN) that likewise acknowledged that the COVID-19 crisis triggers the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers. Those agencies committed to not actively intervening against necessary and temporary measures put in place in order to avoid a shortage of supply. If at all a restriction, the efficiencies would likely outweigh the negative effect on competition.
Antitrust regulators have all cautioned, however, that they will continue to actively enforce the antitrust laws, particularly with respect to companies taking advantage of the current situation through unlawful collaboration or by abusing their dominant position with regard to products deemed as essential to protect the health of consumers.
As the US agencies noted in the joint statement:
While many individuals and businesses have and will demonstrate extraordinary compassion and flexibility in responding to COVID-19, others may use it as an opportunity to subvert competition or prey on vulnerable Americans. The Division and the Bureau will not hesitate to seek to hold accountable those who do so. In particular, the Division and the Bureau stand ready to pursue civil violations of the antitrust laws, which include agreements between individuals and business 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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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Daniel S. Savrin
Silicon Valley/Washington, DC