Antitrust Law and the COVID-19 Pandemic
The coronavirus pandemic is having repercussions in all sectors of the legal community, as illustrated in the prior entries in our “The Coronavirus Pandemic and Your Business: How We Can Help” client alert series. Antitrust law is no exception. The Bureau of Competition of the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) have put out two joint statements in response to COVID-19, one on March 24 and another just last week. Both contain reminders and useful guidance concerning cooperation among market participants during these unprecedented times.
Recognizing that meeting the challenges posed by the pandemic will require collaborative efforts to address pressing health and safety needs, FTC and DOJ highlighted in their March 24 statement certain types of coordinated activity that the antitrust laws generally permit – because they lead to outcomes that are efficiency-enhancing and pro-competitive. These include:
- Collaboration on research and development, as may be the case with R&D for developing a potential vaccine.
- Sharing of information regarding technical know-how as opposed to firm-specific data on prices and outputs.
- Standard setting designed to assist healthcare providers in clinical decision-making.
- Joint purchasing arrangements among medical providers that aid procurement, perhaps of PPE, and reduce transaction costs.
- Lobbying of the federal government regarding the passage and enforcement of laws to respond to the pandemic.
More broadly, FTC and DOJ acknowledged that collaborations that are limited to the duration of the crisis and born of a desire to increase the supply of essential products and services related to COVID-19 may be a “necessary response to exigent circumstances” that benefits patients and consumers who might otherwise be left without such supplies.
That said, antitrust analysis is fact-specific, and, therefore, no one size fits all. To that end, FTC and DOJ also announced that they are expediting their Advisory Opinion Process and Business Review Process, respectively, to provide guidance regarding the propriety under the antitrust laws of proposed conduct related to COVID-19 within seven calendar days of receiving all necessary information.
In their more recent joint statement, FTC and DOJ reminded employers, staffing companies, and recruiters that those who wrongly interfere in labor markets – especially to the detriment of essential workers and first responders – face stiff penalties, including, in some cases, criminal prosecution. No new trails are being blazed here, as unlawful no-poach and wage-fixing agreements, as well as anti-competitive non-compete agreements and the exchange of sensitive employee information, have long been targets of antitrust scrutiny. But when the victims are those on the front line of the pandemic, FTC and DOJ warn, enforcement will be even more vigilant.
One final development relates to premerger notification submissions under the Hart-Scott-Rodino (HSR) Act. Because the pandemic has closed offices and forced many people to work from home, FTC and DOJ have implemented a temporary e-filing system for HSR submissions in lieu of traditional hard-copy or DVD filings. Only HSR submissions filed through the e-filing system will be accepted for as long as the e-filing system remains operative.