Antitrust Considerations in Context of the Pandemic: Cooperation with Other Companies
Business Law Alert 03/26/20 Andre Fiebig
You might have read the pronouncements from the U.S. Department of Justice and the Federal Trade Commission to the effect that they are enhancing their vigilance in the enforcement of the U.S. antitrust laws. This is the first in a series of Quarles & Brady publications explaining from a practical perspective the application of the U.S. antitrust laws in the context of the current pandemic. The article will addresses the new antitrust policy towards cooperation between companies.
To begin, this is a reminder that there is no "crisis exception" built into the U.S. antitrust laws. For example, many companies are concerned with compliance related to anti-price gouging laws. The pandemic does not provide cover to allow competitors to get together to fix the prices at which they are selling their products to comply with the anti-price gouging laws.
Nonetheless, two companies – even competitors – might be able to cooperate in a pro-competitive manner. For example, two competitors of essential products might wish to cooperate to distribute their essential products with the purpose of being able to more efficiently and quickly get the essential products to the needed location. In the past, many competitors would avoid even discussing such practices with their competitors for fear of criminal prosecution by the U.S. Department of Justice. The Department of Justice and the Federal Trade Commission have previously issued Guidelines on such collaboration which can be found here.
In order to offer firms some certainty about the legality of cooperating with other companies, the Department of Justice and the Federal Trade Commission many years ago introduced procedures by which companies could disclose their plans to the agencies and receive either a "business review letter" from the Department of Justice or a "staff advisory opinion" from the Federal Trade Commission. The problem was, however, that these processes took time and required a lot of effort by the companies.
Earlier this week, the Department of Justice and Federal Trade Commission introduced expedited procedures for companies to secure antitrust guidance from those agencies. Those procedures can be found here. Under the new expedited procedures, companies involved in coronavirus-related public health efforts can provide the FTC or Justice Department a written description of the proposed cooperation and receive an expedited response. The significance of procuring a business review letter or a staff opinion is that the agencies will provide companies with clarity regarding whether the antitrust agencies will challenge the particular activity in advance of undertaking that activity. This provides significant relief for those companies who are legitimately wanting to help out by cooperating with other companies.
Additional information about the expedited process and whether it makes sense for your company to apply can be received by reaching out to your Quarles & Brady contact or
- Andre Fiebig : (312) 715-5126 / [email protected]