DOJ Withdraws Policy Statements Governing Information Exchanges Across Industries

On February 3, 2023, the Department of Justice’s (DOJ) Antitrust Division announced the withdrawal of several long-standing policy statements governing the exchange of certain information among competitors. The DOJ has no plans to replace or revise the policy statements, leaving some uncertainty as to how the agencies will handle information exchanges.

For more information regarding the health care aspects of the withdrawal, see “DOJ Withdraws Health Care Antitrust Statements: What’s Next for the Health Care Industry?”

The Agencies’ Policy Statements

Over the last 30 years, the Federal Trade Commission (FTC) and DOJ jointly issued nonbinding antitrust enforcement policy statements to provide guidance to health care providers as to whether and how they may enter into mergers, joint ventures and other collaborative arrangements without violating the antitrust laws. In 1993, the FTC and DOJ issued six “Statements of Antitrust Enforcement Policy in Health Care.” The policy statements were revised in 1994, and updated and expanded in 1996. In 2011, the agencies issued the “Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program.”

Among other things, the policy statements built on existing Supreme Court and federal case law to address the ability of competitors to share pricing, wages and other competitively sensitive information with each other in pursuit of legitimate collaborative activities. Under prior case law, including United States v. U.S. Gypsum Co., 438 U.S. 422 (1978), courts typically analyzed “the structure of the industry involved” and the “nature of the information exchanged.”

In the policy statements, the agencies set forth a “safety zone” for information exchanges among competitors if:

1. the collection of information was managed by a third party (such as a government agency, consultant, academic institution or trade association);
2. the data was at least three months old; and
3. there was a sufficient number of competitors reporting data such that the information was aggregated and anonymized.

Although the policy statements were nominally directed to the health care industry, they have widely been applied to a variety of other industry and trade association activities outside of health care. Courts also looked to these policy statements for guidance over the years. Information exchanges that potentially did not comply with the antitrust laws have spurred enforcement from the agencies or private litigation in a range of industries including, but not limited to, agriculture, construction materials, health care, manufacturing, energy, media and technology.

DOJ Withdraws Policy Statements

Applying the policy statements and relevant case law, the DOJ, FTC and courts have recognized that the reasonable sharing of certain types of competitively sensitive information may not be anticompetitive and could, in fact, be procompetitive. At the same time, the agencies have recently brought enforcement actions challenging information exchanges among, for example, competitors in the food and agriculture sector and the telecommunications and media sector.

Providing insight into the DOJ’s withdrawal, Principal Deputy Assistant Attorney General Doha Mekki explained in a speech that the three policy statements are “outdated,” and that the DOJ is “no longer confident that the documents fully reflect market realities, the risk of serious competitive harm, or the full scope of liability under the antitrust laws.”

In particular, Mekki explained that health care and other industries have become much more data-intensive. In light of these changes, the DOJ has serious concerns about whether the factors set forth in the policy statements for the exchange of certain competitively sensitive information are appropriate today. For example, the policy statement’s requirement that parties use third-party intermediaries to facilitate information exchanges may no longer be sufficient, as such exchanges “can have the same anticompetitive effect as direct exchanges among competitors.” In addition, the value of historical data has increased through the use of pricing algorithms, despite the policy statements’ suggestion that data that is at least three months old is unlikely to be competitively sensitive.

Consistent with the Biden administration’s approach to antitrust enforcement, the DOJ has indicated that it will take a “whole-of-government approach” to anticompetitive information exchanges and evaluate information exchanges on a case-by-case basis. The DOJ does not, however, have plans to replace the three policy statements. The withdrawal leaves some uncertainty as to how competitors and industries can collaborate and exchange competitively sensitive information without running afoul of the antitrust laws, and the agencies are likely to give increased attention to this issue in the future, as evidenced by recent enforcement actions.

Key Takeaways

As always, those conducting collaborative activities with competitors or potential competitors should obtain antitrust advice from counsel prior to exchanging competitively sensitive information. Organizations also should institute or review internal policies and procedures governing the exchange of competitively sensitive information. For trade associations or other organizations that routinely participate in compiling or facilitating surveys and benchmarking analyses, companies can consider obtaining targeted guidance from the agencies through an Advisory Opinion or Business Review Letter.

The DOJ’s withdrawal additionally is consistent with the close scrutiny given to mergers in recent years. As a result, organizations contemplating an M&A transaction also should take precautions to ensure any information exchanged during due diligence is properly protected. Antitrust counsel can help implement a “clean team” process for the necessary exchange of certain information.