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Expedited Review for COVID-19 Procompetitive Collaborations

April 24, 2020

The Department of Justice (“DOJ”) Antitrust Division and Federal Trade Commission (“FTC”) Bureau of Competition issued a joint statement on March 24th outlining expedited procedures for reviewing procompetitive collaborations related to the COVID-19 crisis.  The Agencies are aiming to shorten their response time for providing guidance under their respective review processes from months to within seven (7) days of receiving all necessary information. 

In addition, recognizing the need for immediate action in response to the pandemic, the Agencies’ joint statement reiterates guidance that many types of collaborative activities designed to improve the health and safety response to the pandemic would be consistent with the antitrust laws.  These include:

  • Collaboration on research and development
  • Sharing technical know-how (as distinguished from sharing company-specific data about prices, wages, outputs, or costs)
  • Health care providers’ development of standards for patient management
  • Joint purchasing arrangements among healthcare providers that are designed to increase the efficiency of procurement and reduce transaction costs
  • Private lobbying regarding the federal government’s use of emergency authority

In short, for businesses interested in entering into collaborative arrangements in response to the COVID-19 pandemic, the DOJ and FTC may be able to provide guidance within an expedited time frame of 7 days, and will take into account the procompetitive impact of pandemic response measures.  While the new procedures do not create a safe harbor, they recognize the need for urgent collaborative action. In the limited time the new review procedures have been in place, they have been used to effect twice recently, as explained below.

The DOJ and FTC Processes

Under the DOJ’s business review process, companies intending to engage in proposed business conduct may ask the DOJ for a statement of its current enforcement intentions.  Typical inquiries include proposed joint ventures or the intended exchange of certain business information. After its review, the DOJ issues a business review letter identifying its enforcement intentions regarding the proposed conduct.  While issuance of a business review letter does not preclude the DOJ from bringing a subsequent action or proceeding, the DOJ is unlikely to bring a criminal proceeding where the requesting party provided full disclosure at the time of making the request.

Similarly, the FTC, through the Commission or its staff, offers advisory opinions regarding proposed (future) conduct.[1]  The Agencies’ joint statement outlines specific procedures for COVID-19 expedited requests to the FTC. 

While the Agencies’ processes typically take several months, the new guidance recognizes that many individuals and businesses addressing the rapidly evolving COVID-19 crisis may encounter questions about their lawful collaboration or other joint activity.  Accordingly, 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. 

The Agencies have also committed to expeditiously process COVID-19 related filings made under the National Cooperative Research and Production Act, 15 U.S.C. §§ 4301-6 (the “NCRPA”).  The NCRPA provides benefits to joint ventures engaged in research and development and production activities and standard development organizations for filing notice of their activities with the DOJ and FTC.  Benefits of the NCRPA include avoiding per se treatment, limiting potential liability to actual as opposed to treble damages, and the potential for cost and fee shifting for defending frivolous claims.  More information regarding the NCPRA and its notice requirements are available here.

The Agencies’ joint statement does not identify any changes to the requirements for pre-merger notification filing under the Hart-Scott Rodino Act for transactions exceeding certain monetary thresholds.  Accordingly, businesses should continue to pay attention to and comply with those requirements for larger deals.

Use of the Expedited Procedures

The DOJ has issued two business review letters under the new expedited procedures.  In both letters, the DOJ found limited time collaboration between competitors in the healthcare supplies and pharmaceuticals industries supporting U.S. Government efforts in coordinating the medical supply chain were unlikely to raise antitrust concerns.  Among other reasons, the DOJ cited federal agency immunity to antitrust scrutiny (and those acting at its direction), the time limited nature of the collaboration, and the likely procompetitive benefits of increasing supply as key reasons why anticompetitive harm from the collaboration is unlikely.  Notably, the competitors represented to the agency that they would not use the collaboration as a means to “to increase prices, reduce output, reduce quality, or otherwise engage in COVID-19 profiteering.”

If you have any questions about the DOJ and FTC Joint Statement regarding COVID-19 or ensuring compliance with applicable antitrust laws related to your efforts to address the COVID-19 pandemic, please contact Shipman & Goodwin’s Antitrust team.


[1] See 16 C.F.R. § 1.1(a)

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