Competitor Collaboration in Times of Crisis

Collaboration between competitors may be needed to address the COVID-19 pandemic.  This memorandum summarizes antitrust considerations that businesses may want to consider before engaging with their competitors in the current circumstances.

First, we provide an overview of the European and U.S. rules on horizontal agreements, which allow for the weighing of consumer benefits of collaboration against any anti-competitive effects.

Second, we summarize adjustments to antitrust law enforcement that European and U.S. agencies have introduced in the context of the COVID-19 crisis, to clarify and, in some cases, complement existing rules.  These responses include: (i) new guidelines to address the situation; (ii) re-stated enforcement priorities; (iii) an increased willingness to provide guidance on specific proposals; and (iv) temporary exemptions from antitrust rules.  Notably, the European Commission just established a temporary framework for the assessment of horizontal agreements that seek to increase supplies of medical products.  Likewise, the U.S. FTC and DOJ are offering an expedited review of pandemic-related inquiries.

Finally, we provide practical guidance for businesses.  To reduce risk, businesses should where possible limit competitor cooperation to temporary arrangements that aim to resolve supply shortages, and avoid collaborations that impact long-term industry structure.  Regardless of the scope of the collaboration, businesses should document the scope and purpose of any agreements and monitor executives’ and employees’ communications with competitors.  Finally, businesses should monitor agency communications so they can, where possible, fit their conduct into temporary exemptions and/or agency guidelines.

This memorandum continues a series on antitrust topics that we expect to be particularly relevant at this time.  It supplements the materials available on our Resource Center, including our previous COVID-19 antitrust update and our agency status tracker.