CEO DATELINE - Associations must be mindful of antitrust laws during pandemic
CEO DATELINE - Associations must be mindful of antitrust laws during pandemic
- March 31, 2020 |
- Walt Williams
The COVID-19 pandemic has drastically changed the way many Americans are doing business, but companies and associations must remember that antitrust laws remain in force as they discuss ways for their industries to weather the crisis, attorneys from two different law firms have warned in recent days.
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Since the start of the pandemic, associations have brought together business competitors to discuss industry responses to the health crisis, attorneys with Faegre Drinker wrote in a March 18 essay on the law firm's website. Such meetings are important and a way for various industry actors to share best practices relating to safety, technology and logistics.
Still, there is no "emergency" exception to the federal, state and international antitrust laws, the attorneys said. In fact, both the Department of Justice and the Federal Trade Commission have told businesses not to expect relaxation of antitrust enforcement in the wake of the pandemic.
"Businesses that engage in anticompetitive conduct at this time should expect a swift reaction from the federal enforcement agencies, particularly if their conduct exploits vulnerable workers or consumers," the attorneys said.
Association meetings pose a legal risk to participants if competitors exchange competitively sensitive information or form anticompetitive agreements relating to topics such as prices, wages, benefits and business strategy, they said. By contrast, it is less risky to discuss various non-price and compensation-related interventions that businesses have implemented—like mandatory hand washing—and the pros and cons of different approaches.
Attorneys with the law firm Lowenstein Sandler gave similar advice in a March 24 essay, noting that it is legal for businesses to come together through an association to discuss measures to protect health and safety, but not to form agreements that limit competition. For example, it is okay for members of a large retail trade association to discuss best practices to protect consumer safety, but it probably not okay for those same members to discuss whether they should all close during a certain period of time.
The "all in it together" instinct that unites industry competitors during a crisis "is the polar opposite of antitrust law's core principle that competing businesses must make their own decisions on issues that affect competition with each other," the attorneys said. "Deciding competitive issues together reduces the risk to each business by ensuring they all act in the same way."
Faegre Drinker recommends that associations consult with antitrust counsel if there are any concerns about the nature of the issues discussed at a meeting and have those attorneys sit in or listen in. The firm also suggests making an antitrust statement before the meeting begins that lays out the appropriate ground rules.
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