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In brief

On February 3, 2023, the U.S. Department of Justice (“DOJ”) announced the withdrawal of three antitrust policy statements that allowed certain information exchanges between competitors in healthcare markets. The day before this announcement, Principal Deputy Assistant Attorney General Doha Mekki of DOJ Antitrust Division warned that DOJ would reconsider these outdated policy statements in light of recent changes in the healthcare industry.


Background

In a speech on February 2, 2023, Principal Deputy Assistant Attorney General Doha Mekki said that DOJ would revisit or withdraw three sets of policy statements that were issued jointly by DOJ and the Federal Trade Commission (“FTC”) over the past three decades. Following Mekki’s remarks, on February 3, 2023, DOJ announced that it was withdrawing the three policy statements. The policy statements had recognized certain exchanges of competitively sensitive information among competitors in the healthcare industry that were unlikely to raise material antitrust concerns:

  • In 1993, DOJ and FTC issued Antitrust Enforcement Policy Statements Issued for Health Care Industry (“1993 Policy Statements”), which established a “safety zone” allowing physicians to provide purchasers of healthcare services with non-price information including underlying medical data. The 1993 Policy Statements recognized that the provision of this type of information has procompetitive benefits and allows physicians to work with healthcare purchasers to improve the quality of care that patients receive. The 1993 Policy Statements also established a safety zone covering hospital participation in surveys of service prices or personnel compensation. This safety zone applied where (1) the survey is managed by a third party, (2) the information collected for the survey is more than three months old, and (3) the information is based on data from at least five hospitals and aggregated so that the prices charged or compensation paid by particular hospitals cannot be identified.
  • In 1996, the agencies issued Statements of Antitrust Enforcement Policy in Health Care (“1996 Policy Statements”), which expanded the safety zones defined in the 1993 Policy Statements.
  • In 2011, the agencies issued Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, which addressed information exchanges in the provision of healthcare services to Medicare patients.

Mekki observed that the healthcare industry has evolved over the past thirty years and has become an “[i]ncreasingly . . . data intensive industry that relies on the power of machine learning, artificial intelligence, and other advanced tools to develop or deliver products or services.” In light of these developments, Mekki noted that these policy statements were “outdated” and may not reflect current market realities or the full scope of liability under the antitrust laws. Commenting on the withdrawal of the policy statements, Assistant Attorney General Jonathan Kanter of DOJ Antitrust Division also remarked: “The Antitrust Division will continue to work to ensure that its enforcement efforts reflect modern market realities.”

Mekki also expressed concern that the “safety zones” in the healthcare policy statements “do not consider the realities of a transformed industry” and “understate the antitrust risks of competitors sharing competitively-sensitive information.” Specifically, Mekki observed that (1) third-party intermediaries who facilitate information exchanges may still enhance anticompetitive effects; (2) data that are at least three months old may still be competitively sensitive given the rise of data aggregation, machine learning, and pricing algorithms that rely on historical data; and (3) information exchanges involving at least five participants may still harm competition.

Notably, Mekki’s concerns about exchanges involving intermediaries, historical data, and aggregated data from numerous participants were not limited to the healthcare context. Indeed, Mekki observed that in some industries, sophisticated algorithms can ingest historical, aggregated data to glean insights about the strategies of a competitor. “Where that happens,” she warned, “the distinctions between past and current or aggregated versus disaggregated data may be eroded.” This suggests that, despite similar guidance provided in policies such as DOJ and FTC’s Antitrust Guidance for Human Resource Professionals, the agencies may revisit or withdraw such policies beyond the healthcare context.

Mekki also announced that DOJ will closely scrutinize proposed mergers when the industry has a history of collusion or when a merging party has previously engaged in an anticompetitive information exchange. “Merging parties will face an uphill battle convincing us that post-merger coordination or collusion is unlikely,” Mekki warned.

Finally, Mekki affirmed DOJ’s commitment to enhancing its “whole-of-government” approach to competition issues, as mandated by President Joe Biden’s Executive Order on Promoting Competition in the American Economy. Mekki emphasized that DOJ and its enforcement partners are working together toward a common objective: “vibrant, free markets that are free of anticompetitive conduct and consolidation.”

Notwithstanding the withdrawal of the healthcare policy statements, to date, DOJ has not addressed whether this policy change will affect competitor collaborations involving how to structure joint ventures and group purchasing organizations. To this end, the current guidelines and business review letters regarding competitor collaborations still remain in effect. In addition, FTC has not publicly indicated whether they will follow suit and similarly withdraw from any or all of the three policy statements.

Key Takeaways

DOJ’s withdrawal of the policy statements signals that it is continuing to pursue vigorous antitrust enforcement and is intensifying scrutiny of information exchanges between competitors. Although the withdrawn policy statements were specific to the healthcare industry, this withdrawal signals potential further efforts to examine information exchanges beyond the healthcare context. For this reason, companies in all sectors should consider taking steps to mitigate antitrust liability. In particular:

  • Companies that participate in information exchanges compliant with the now-withdrawn guidance should take a fresh look at their antitrust risk profile.
  • Companies should implement antitrust compliance programs that include training on contacts with competitors, including which types of information exchanges may be anticompetitive.
  • Companies should develop internal policies and controls around communications with competitors.
  • Companies that have not conducted an annual antitrust risk assessment and compliance review should consider doing so as soon as possible.
  • Companies should be extra cautious when considering any information sharing and consult legal counsel.

We will continue to monitor developments in this area.

Author

Mark H. Hamer is Global Chair of the Firm's Antitrust & Competition Practice Group, comprised of over 300 competition lawyers in over 60 offices across 43 countries. Mark has over 25 years of wide-ranging litigation experience, including first-chair roles in jury trials, bench trials and arbitrations. His primary focus is antitrust litigation. Before joining Baker McKenzie, Mark was a successful trial attorney in the Antitrust Division of the US Department of Justice. He was involved in some of the DOJ's highest-profile antitrust trials. Before joining the DOJ, Mark was a partner at another global law firm where he handled complex multidistrict antitrust class actions in courts across the nation.

Author

Creighton Macy is the Chair of Baker McKenzie's North America Antitrust & Competition Practice Group. Creighton is recognized as a leading global antitrust practitioner.

Creighton has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as Chief of Staff and Senior Counsel in the DOJ Antitrust Division, working as a senior advisor to the Assistant Attorney General on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Creighton began his career as a Trial Attorney in the Litigation III and Transportation, Energy, and Agriculture sections of the Antitrust Division, working on a number of notable merger and civil non-merger investigations and cases. Before rejoining the Antitrust Division as its Chief of Staff, he was a member of another global law firm's antitrust practice, where he advised clients on a wide range of US and international antitrust issues.

Creighton is consistently recognized globally for his market-leading antitrust practice with respect to high-stakes transactions, investigations, and compliance and counseling work. For example, clients have noted that Creighton “shines above the rest’ due to his first-rate cartel and merger control-related practice.’” He also regularly speaks and publishes articles relating to a variety of antitrust issues, and has been recognized many times for his contributions and thought-leadership on these issues.

Creighton is currently Co-Chair of the American Bar Association Antitrust Law Section’s Young Lawyers Task Force. In previous roles, he served as Reporter of the Presidential Transition Task Force, as well as Chair of the Trade, Sports, and Professional Associations Committee. He is highly involved in mentoring programs, including with the Antitrust Law Section, as well as Marquette University Law School, where he previously served as the DC Representative of the Alumni Board.

Creighton graduated from Marquette University, where he was an NCAA Division I Academic All-American tennis player. During his time at Marquette, he was awarded the Athletic Department’s Cura Personalis award by his peers, as well as several leadership awards. More recently, Creighton was named the Athletic Department’s Young Alumnus of the Year Award.

Author

Nandu Machiraju is a counsel in Baker McKenzie's North America Antitrust & Competition Practice Group. He has significant industry experience in antitrust matters affecting the healthcare, pharmaceuticals, chemicals, mining, and technology sectors. Nandu advises clients on a wide range of antitrust matters and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, conduct matters, compliance, and litigation. Before joining the Firm, Nandu worked as an attorney with the US Federal Trade Commission (FTC). Most recently, Nandu was an attorney in the Bureau of Competition’s Litigation Group where he served a critical role on merger litigation challenges in the hospital and medical-device industries. Before that, he served as an Attorney Advisor to FTC Chairman Joseph J. Simons where he advised on enforcement, appellate advocacy, policy, and congressional relations as well as matters relating to agency management. Nandu also was an attorney in the Mergers I Division where he worked on mergers involving pharmaceuticals, medical devices, retail pharmacies, and cement plants. Before joining the FTC, Nandu was an associate at an international law firm where he practiced antitrust and competition law in that firm’s Washington, D.C. and Brussels offices.

Author

Jeff Martino brings an in-depth understanding of a wide variety of white collar and fraud related matters to his antitrust litigation and investigations practice. Jeff is co-lead of the Firm's Global Cartel Task Force and represents multinational corporations and their boards and executives in high-stakes criminal and civil investigations by the US Department of Justice (DOJ) and other federal and state agencies Prior to joining Baker McKenzie, Jeff spent nearly two decades at the DOJ and his last 7 years as a senior leader in two different DOJ components. He has extensive experience as “first chair” on trials and investigations in the most complex areas of criminal antitrust. Jeff's work at the DOJ included providing technical assistance to competition agencies in Asia, Africa, the Americas and Europe and overseeing matters that included international corruption and antitrust cartel offenses that entangled the largest global banks and their key executives.

Author

Catherine Koh Stillman is a partner in the Firm’s Antitrust & Competition Practice Group. She is global co-lead of the Firm’s Competition Litigation Task Force. Catherine is the leader of the New York office’s BakerWomen Initiative and is a member of the BakerWomen Steering Committee. She serves on the New York office’s Associate Recruiting Committee. Catherine has mentored numerous associates throughout her career at Baker McKenzie, and has maintained an active pro bono practice, focusing primarily on advocacy issues related to children and public international law.

Author

Mark Weiss is a partner in the Firm's North America Antitrust & Competition Practice Group. He is an experienced litigator and counselor with proficiency in antitrust litigation, class-action defense, federal multi-district litigation, and no-poach defense. Mark has vigorously and tirelessly represented clients in a variety of industries including manufacturing, mining, high-tech industries, banking, defense contracting, aerospace, and energy.
As an experienced antitrust counsel, Mark has also conducted cartel investigations and internal compliance reviews, and regularly provides antitrust advice on a broad range of non-litigation matters, including sales and distribution advice, antitrust compliance, competitive merger analysis, and merger clearance strategy.
Prior to joining Baker McKenzie, Mark worked at another global law firm with a focus on class-action antitrust litigation, including defending a global electronics manufacturer from price-fixing and collusion claims, defending a major global financial institution from antitrust collusion and boycott claims, and defending a large government defense contractor from claims alleging illegal no-poach agreements.

Author

Ashley Eickhof is a senior associate in the Firm's North America Antitrust & Competition Practice Group. Ashley is an experienced litigator and has tried criminal cases in federal court.
Prior to joining Baker McKenzie, Ashley worked at another large international law firm in the Antitrust and Competition Practice Group. Before that, Ashley began her career as a federal prosecutor for the Antitrust Division of the US Department of Justice.

Author

Dan is a senior associate in Baker McKenzie's North America Antitrust & Competition Practice Group.
Dan is an antitrust specialist whose practice focuses on merger control, civil conduct investigations, corporate counseling and compliance, and civil litigation. He advises client across a broad range of industries in matters before US and foreign competition authorities.
Dan maintains an active pro bono practice. He is also an active member of the ABA Section of Antitrust Law and is currently a Vice Chair for the Unfair Competition Committee.

Author

Audrey van Duyn is an associate in Baker McKenzie's Antitrust & Competition Practice Group in New York. She advises clients on all aspects of antitrust law before the Department of Justice and Federal Trade Commission. Prior to joining the Firm, Audrey was a litigation associate at a large national law firm where she assisted with a variety of civil, criminal, and regulatory matters. During law school, Audrey interned for Judge Nicholas G. Garaufis of the US District Court for the Eastern District of New York and for Judge Paul G. Gardephe of the US District Court for the Southern District of New York. She worked as a research assistant for Professor Daniel J. Capra and focused on evidence and criminal procedure. She was also a member of the Fordham Moot Court and the Fordham Urban Law Journal.

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