On March 24, 2020, the Antitrust Division of the Department of Justice and the Bureau of Competition of the Federal Trade Commission (collectively, the “Agencies”) issued a joint statement concerning ways that firms, including competitors, can engage in lawful collaboration in responding to the COVID-19 pandemic. In the statement, the Agencies committed to provide businesses with prompt guidance about how to ensure their efforts to provide needed relief – in the forms of goods, commodities, products, and services – comply with U.S. competition laws.
In the context of health care providers, the Agencies recognized that health care facilities may need to work together to provide resources and services to communities lacking access to personal protective equipment, medical supplies, or health care; and that other businesses may need to temporarily combine their production, distribution, and service networks to produce and distribute COVID-19 related supplies they may not have traditionally produced or sold.
In evaluating whether a potential collaboration between your business or health care organization and its competitors would be consistent with antitrust laws, it is important that you consider the following questions:
- Will both parties to the collaboration contribute significant assets to the joint effort?
- Will the collaboration enhance efficiencies with respect to providing needed goods or services to those affected by COVID-19?
- Does the collaboration involve the exchange of information, including technology, know-how, or other intellectual property, which may be essential to achieving pro-competitive benefits of collaboration; or, on the other hand, does the collaboration involve sharing information related to price, output, costs or strategic planning, which would likely raise anti-competitive concerns?
- Does any planned joint purchase – of customary items, such as laundry, food services, and prescription drugs; or supplies such as sterile gloves and face masks—allow for the participants to obtain volume discounts, reduce transaction costs, or maximize efficiencies in providing service to the community?
It is also key to remember that the exigent circumstances surrounding COVID-19 can lead to temptation by individuals or companies to engage in anti-competitive conduct such as fixing prices for protective equipment or attempting to improperly allocate consumers between competing firms. As a result, your well-intentioned collaborative efforts could draw attention from regulators at the federal and state level. To best ensure the lawfulness of any potential collaboration, businesses and health care organizations should work closely with their legal counsel and consider requesting an evaluation from regulators regarding their proposed conduct.
If you have any questions, please contact Gunster attorney Jonathan Osborne.
