In response to the COVID-19 pandemic, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice have changed two of their review processes. Earlier this week, the FTC and DOJ issued a joint statement reducing the burdens associated with antitrust reviews of collaborations between businesses and providing some guidance regarding collaborative activities that are permitted under the antitrust laws. Last week, the agencies also made significant changes to the timing and process for reviewing transactions that are subject to mandatory reporting under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act), which are likely to result in longer HSR reviews.
Expedited Conduct Review Process
The agencies have established expedited antitrust reviews for conduct and collaborations aimed at protecting the health and safety of Americans during the COVID-19 pandemic. Under the new process the agencies will respond to all requests addressing the COVID-19 crisis within seven calendar days of receiving all of the information they need in order to adequately vet these proposals. This expedited process provides the same assurances to businesses concerned about the legality of proposed conduct or collaborations without the typical lengthy review timeline. The FTC’s “Staff Advisory Opinion” procedure and the DOJ’s “Business Review Letter” procedure allow anyone, to submit a proposal to the agencies and to receive a statement advising whether the agencies would challenge the proposed activity. However, the standard processes typically take months and sometimes can drag on for more than a year. The new process will take only days. The expedited process only requires that applicants to provide the agencies with a written description of the proposed conduct or collaboration, including the parties that would be involved in the effort or activity, and the name and contact information of a person from whom the agencies could obtain additional information. The agencies have also committed to expediting requests under the National Cooperative Research and Production Act for the flexible treatment of certain standard development organizations and joint ventures.
Permitted Collaborative Activities
To help companies move forward as quickly as possible, the agencies also provided a list of collaborative activities with the potential to improve the health and safety response to the pandemic that the antitrust agencies have already recognized as consistent with the antitrust laws and unlikely to cause any harm to competition. For example:
Modified HSR Review Process
The agencies are experiencing significant disruptions of their own due to the COVID-19 pandemic, and last week they made significant changes to the timing and processes in place for reviewing transaction that are subject to mandatory reporting under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) to address some of those challenges. New procedures that will be in place until further notice include:
In addition, it is possible that the HSR timing and process could change again because of Congressional action or changes in how the agencies respond to the COVID-19 crisis.