March 27, 2020

Federal Antitrust Authorities Offer Guidance to Businesses Eager to Assist With Coronavirus Pandemic

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) (and collectively, the agencies) issued on March 24, 2020 their Joint Antitrust Statement Regarding COVID-19 (Joint Statement) regarding their respective plans to provide guidance to businesses contemplating conduct and business strategies that may have antitrust implications during the COVID-19 health care crisis. In particular, the agencies will “aim to respond expeditiously to all COVID-19-related requests, and to resolve those addressing public health and safety within seven (7) calendar days of receiving all necessary information.” Once the opinion is issued, it will remain in effect for one year from the date of response.

Businesses traditionally have been able to request opinions from the agencies (so-called Business Review Letters from the DOJ and Advisory Opinions from the FTC) regarding proposed conduct that does or could implicate the antitrust laws. The requests vary widely but have covered topics such as potential mergers, collaborations and joint ventures, trade associations and information exchanges, and unilateral conduct such as exclusive dealing, tying and price discrimination. While Business Review Letters and Advisory Opinions do not carry the force of law, they are intended to provide the requesting businesses, along with the broader business and legal communities, with insight into the agencies’ thinking about the application of particular antitrust principles. As a practical matter, when a Business Review Letter or Advisory Opinion blesses the requesting businesses’ proposed course of action, it is unlikely the agencies would later challenge that conduct, and the opinion itself acts as a deterrent for private plaintiffs as well.

One of the potential downsides to requesting a Business Review Letter or an Advisory Opinion is that the agencies have not always turned around their guidance quickly. For example, a review of the DOJ’s recent Business Review Letters shows that it often takes the agency several months to issue an opinion after the request is first made. In fast-paced business climates, waiting this long for agency guidance is often not feasible. That is particularly true in the current climate where businesses are working quickly to respond to internal and external problems posed by the COVID-19 pandemic. These efforts likely include, but certainly are not limited to, efforts between trade association members and competitor collaborations to expand production, bring new products to market and facilitate distribution. In addition, the agencies foresee that “[otherwise competing] 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.” By expediting the review process, the agencies aim to help businesses ensure that their efforts to respond to the national health emergency comply with the federal antitrust laws.

In addition, the Joint Statement specifically contemplates that “joint ventures may be necessary for businesses to bring goods to communities in need, to expand existing capacity, or to develop new products or services.” To that end, the agencies also have committed to expeditiously processing filings made under the National Cooperative Research and Production Act (NCRPA). In general terms, the NCRPA provides that joint research, development or production ventures that file appropriate written notification with the agencies will not be subject to the typical treble damages awards that are characteristic of antitrust litigation in the event that the joint venture and its members are sued.

And finally, while the agencies are committed to helping businesses craft creative and compliant solutions to address the coronavirus pandemic, they remain equally committed to enforcing the antitrust laws if businesses “use [the crisis] as an opportunity to subvert competition or prey on vulnerable Americans.” The Joint Statement explicitly directs individuals and businesses to contact the agencies to report any unlawful conduct.

The antitrust laws are nuanced and complex, and their application to particular circumstances depends on the facts and circumstances at play. While businesses are rightly eager to aid the national effort to combat the current health emergency, they should consult with antitrust counsel, and at least consider seeking guidance from the agencies, before engaging in any conduct that may implicate the antitrust laws.

As the number of cases around the world grows, Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.

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