Antitrust cops to speed collaboration reviews in COVID-19 fight

Regulators also pledge to crackdown on price gouging and other conduct

The Department of Justice says it will criminally prosecute conduct such as price gouging amid the pandemic. (Bill Clark/CQ Roll Call file photo)
The Department of Justice says it will criminally prosecute conduct such as price gouging amid the pandemic. (Bill Clark/CQ Roll Call file photo)
Posted March 26, 2020 at 12:33pm

Antitrust regulators are pledging to quickly review proposed collaborations among businesses aimed at protecting the health and safety of Americans during the COVID-19 pandemic.

Under the expedited system, the Department of Justice’s Antitrust Division and the Federal Trade Commission will resolve coronavirus-related requests that involve public health and safety within seven days of receiving all information necessary to vet them. It’s among a flurry of recent efforts by regulators and policymakers globally to respond to challenges such as supply shortages and price gouging during the crisis.

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“Under these extraordinary circumstances, we understand that businesses collaborating on public health initiatives may need an expedited response from U.S. antitrust authorities,” FTC Chairman Joseph Simons said in a statement.

The agencies issued joint guidelines detailing how the new process works. Because of the pandemic, retailers are struggling to keep up with consumer demand for many products, including face masks and hand sanitizer. As some companies consider working together in the crisis, the antitrust guidance is designed to resolve potential legal questions.

For example, health care facilities may need to work together to provide resources and services to communities without immediate access to personal protective equipment, medical supplies or health care, according to the guidelines. Other businesses may need to temporarily combine production, distribution or service networks to facilitate production and distribution of virus-related supplies they may not have traditionally dealt with, the agencies said.

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Proposed partnerships among rivals generally get vetted by the government for competition reasons, which can take several months. However, the FTC and DOJ said they recognize that many businesses in the current environment are trying to respond as rapidly as possible.

At the same time, the agencies said they won’t hesitate to hold accountable those who try to use the pandemic to engage in antitrust violations.

DOJ in particular will criminally prosecute conduct such as price-fixing, bid-rigging or market allocation, they said. The FTC has separately teamed up with the Food and Drug Administration to warn companies against selling unapproved products that may violate federal law by making deceptive or scientifically unsupported claims about their ability to treat the virus.

Meanwhile, Sen. Amy Klobuchar, D-Minn., introduced a bill this week that would give the FTC explicit authority to crack down on price gouging, with the power to impose civil penalties of up to $10,000 per violation and injunctions.

The measure would apply to “essential” goods and services needed to protect the public from potential harm resulting from a natural disaster or pandemic.

The new DOJ-FTC process for clearing coronavirus-related collaborations generally requires that an applicant provide either agency with a written description of the proposal, including the parties that would be involved. The agencies said they will consider exigent circumstances in evaluating efforts to address the spread of the virus and its aftermath.

Antitrust regulators across Europe took a similar step this week, issuing a joint statement saying they don’t plan during the crisis to “actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply.” Amazon.com Inc. recently decided to temporarily stop accepting “non-essential” products at its warehouses to make room for more critical items amid the pandemic.

The online retail giant is also monitoring price gouging on its platform.

Sen. Edward J. Markey, D-Mass., a co-sponsor of Klobuchar's bill, asked Amazon in a March 4 letter to detail its efforts to address the problem. He cited a Financial Times article saying that prices for some Amazon items represented a more than 2,000 percent markup from the typical price.

For example, a pack of 24 bottles of Purell hand sanitizer, typically sold for less than $10 per box, was listed at $400.

“No one should be allowed to reap a windfall from fear and human suffering,” Markey wrote in his letter. "Internet-based retailers such as Amazon.com have a particular responsibility to guard against price gouging in current circumstances as consumers — who are finding the shelves of local brick-and-mortar stores bare, and who may wish to avoid venturing into crowded stores and shopping malls — turn to the internet.”

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