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.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 13 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 280 attorneys and consultants, and over 290 committed professional staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.
