COVID-19 is disrupting business activities and global markets in unprecedented ways. In response, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) have issued a variety of statements and implemented procedural changes regarding enforcement of antitrust laws and review of business mergers and acquisitions.
Businesses should be aware of the following recent actions by the DOJ and FTC. Due to rapidly changing responses to the COVID-19 pandemic, businesses should also consult with their antitrust counsel to remain up to date on new developments and to identify appropriate strategies.
DOJ warns about price-fixing, bid-rigging, and market allocation schemes
On March 9, 2020, DOJ issued a warning about its intention to investigate and hold accountable anyone violating antitrust laws with respect to the manufacturing, distribution, or sale of public health products such as face masks, sterile gloves, respirators, and diagnostics in connection with the COVID-19 pandemic. Individuals or companies that engage in price-fixing, bid-rigging, or market allocation schemes could be criminally prosecuted. To that end, DOJ also recently announced a Procurement Collusion Strike Force that will be on “high alert” for anticompetitive practices with respect to sales of such products to federal, state, and local government agencies. [1]
DOJ implements temporary changes to civil merger investigation processes
On March 17, 2020, DOJ announced that it adopted a series of temporary changes to its civil merger investigation processes while COVID-19 disruptions continue. The temporary changes include the following:
- the Antitrust Division is requesting an additional 30 days in timing agreements to complete review of transactions after parties involved in mergers comply with document requests, with the potential for revisiting timing agreements based on further developments;
- the Antitrust Division will conduct meetings by phone or video conference if possible; and
- all scheduled depositions are postponed and will be rescheduled using secure videoconferencing capabilities. [2]
FTC issues COVID-19 guidance for Hart-Scott-Rodino (HSR) filings
On March 13, 2020, the FTC’s Premerger Notification Office (PNO) suspended all hard copy and DVD submissions of HSR filings, and on March 17, 2020, the PNO and DOJ began accepting HSR filings through a temporary e-filing system. The PNO also issued new guidance about the e-filing process on March 17, 2020. Apart from providing guidance about the process for completing e-filing submissions, the PNO stated that review of HSR filings “will continue as normal,” even though it “will not be granting” early termination of the HSR waiting period. [3] The last grants of early termination occurred on March 13, 2020, and the PNO will not grant early termination for any other transactions while the temporary e-filing system is in place, even if parties to transactions completed HSR filings before March 13, 2020.
FTC review of investigations and litigations for timing modifications
Apart from other changes in procedures announced by the FTC’s Bureau of Competition on March 16, 2020, the Bureau is conducting a “matter-by-matter review” of its investigations and litigations to identify appropriate modification of statutory or agreed-to timing. The Bureau is reaching out to parties and their counsel to propose modifications and it is inviting parties and their counsel to propose modified time periods. The Bureau is seeking “a flexible and reasonable approach,” but the Bureau warns that it “will take affirmative action” if an unmodified time period inhibits its ability to “address competitive concerns,” particularly because “virtually all” of the Bureau’s employees are working remotely and official travel is restricted. [4]
- US Dept. of Justice press release, “Justice Department Cautions Business Community Against Violating Antitrust Laws in the Manufacturing, Distribution, and Sale of Public Health Products” (Mar. 9, 2020), available at https://www.justice.gov/opa/pr/justice-department-cautions-business-community-against-violating-antitrust-laws-manufacturing. [Back to reference]
- US Dept. of Justice press release, “Justice Department Announces Antitrust Civil Process Changes for Pendency of COVID-19 Event” (Mar. 17, 2020), available at https://www.justice.gov/opa/pr/justice-department-announces-antitrust-civil-process-changes-pendency-covid-19-event. [Back to reference]
- U.S. Federal Trade Commission, “COVID-19 – Guidance for Filing Parties” (updated Mar. 17, 2020), available at https://www.ftc.gov/enforcement/premerger-notification-program/guidance-filing-parties. [Back to reference]
- Ian Connor, Bureau of Competition, “Changes in Bureau procedure during COVID-19 coronavirus pandemic” (Mar. 16, 2020), available at https://www.ftc.gov/news-events/blogs/competition-matters/2020/03/changes-bureau-procedure-during-covid-19-coronavirus. [Back to reference]