The two federal antitrust agencies have promised to issue advisory opinions on business collaborations within seven days of receiving necessary information during the coronavirus outbreak.
The Federal Trade Commission and the Department of Justice’s antitrust division on Tuesday issued a joint statement on their response to the spread of the coronavirus. They said they were expediting those opinions to help businesses plan potential collaborations during the outbreak.
The agencies’ processes for advising companies – the DOJ’s Business Review Process and the FTC’s Advisory Opinion Process – typically last months, but they promised to resolve covid-19-related requests “addressing public health and safety” within seven calendar days from receiving sufficient information from the companies.
They also said they would speed up processing of notifications filed under the National Cooperative Research and Production Act, which can allow a joint venture or standards development organisation to limit its civil antitrust liability.
Collaborations by healthcare providers or combinations of production capacity by businesses are examples of potentially necessary responses to the spread of the disease, the agencies said.
“These sorts of joint efforts, limited in duration and necessary to assist patients, consumers, and communities affected by COVID-19 and its aftermath, may be a necessary response to exigent circumstances that provide Americans with products or services that might not be available otherwise,” they wrote in the statement.
They warned, however, that some bad actors may use the crisis as an opportunity to get away with antitrust violations and harm consumers, and said they will continue to prosecute civil and criminal violations of antitrust law.
Agency veterans praised the statement for outlining a useful response to the fast-changing public health crisis.
Crowell & Moring antitrust partner Alexis Gilman, a former assistant director for merger enforcement at the FTC, said the sped-up advisory processes are “a very helpful option to have available”.
Gilman said the agencies’ responses to the requests can help inform other companies’ decisions on whether to undertake similar collaborations.
But the agencies also made clear they will continue to enforce the antitrust laws during the crisis, he said.
“The antitrust laws are clearly not being put on hold either,” Gilman said.
Gilman noted that the changes to the advisory opinion processes do not affect merger review, which may be on a slower track given that the agencies have stopped granting early terminations due to changes to the filing process made in response to the coronavirus.
Former FTC chair William Kovacic called the changes to advisory opinion timelines “an effort to dramatically accelerate a process that usually takes considerably longer”.
“I see this as a very healthy adaptation of the existing framework to deal with an emergency,” Kovacic said.
Kovacic also said that advisory letters from the agencies have made important contributions in the past, calling DOJ advisory opinions on the MPEG video file standard an essential contribution to standard-setting in that field.
Former acting FTC chair Maureen Ohlhausen, now a partner at Baker Botts, said the advisory processes would be useful for companies with serious questions about whether a collaboration would violate the antitrust laws.
“It’s good to be appropriately cautious about where the boundaries are,” she said.
She said the one-week response time shows the agencies are adapting and shifting resources to address the crisis.
Open Markets director of enforcement strategy Sally Hubbard also praised the move by the agencies.
“I don’t have any problem with this,” Hubbard said. “I think it may be necessary to get faster results in this crisis.”
She said she worries that other aspects of the government’s response to the crisis, such as bailouts for companies hurt by coronavirus-related economic disruptions, could lead to anticompetitive consolidation.
The American Antitrust Institute said the antitrust agencies provided “needed transparency on how they will address ‘cooperation and coordination’” in the statement, but added that more safeguards should be in place to make sure coordination responding to the crisis is pro-competitive.
“The potential for violations by firms in highly concentrated markets and with histories of previous antitrust violations should be front and center on the government’s radar screen,” the AAI said in a statement.