For over 20 years, federal antitrust enforcers have provided guidelines to companies doing business in the United States as to when the enforcers believe competitor collaborations are anticompetitive. Following the most recent withdrawal of such guidelines with no replacement, companies must now look to caselaw and antitrust counsel for guidance. This alert describes the impact of withdrawing the guidelines and what companies can do now to mitigate antitrust risk around competitor collaborations.
Background
On December 11, 2024, the Federal Trade Commission (FTC) and the U.S. Department of Justice’s (DOJ) Antitrust Division jointly withdrew the Antitrust Guidelines for Collaborations Among Competitors (Guidelines). According to a joint statement issued by the agencies, the Guidelines “no longer provide reliable guidance to the public about how enforcers assess the legality of collaborations involving competitors.”1 Instead, the agencies encourage businesses considering collaborating with competitors to “review the relevant statutes and caselaw to assess whether a collaboration would violate the law.”2
This joint move continues the recent trend of the agencies withdrawing antitrust “safe harbors” that they view as outdated and no longer warranted under federal antitrust laws.3 While the Guidelines were not a formal safe harbor that immunized anticompetitive conduct, they were helpful in stating enforcement intentions. The withdrawal of the Guidelines removes the transparency and guidance that they provided to businesses. As a result, businesses are left “grasping in the dark” without any clear guidance as dissenting FTC Commissioner Holyoak observed.4 It is likely that the new administration will issue new guidance for competitor collaborations at some point. In the meantime, however, companies will need to consult with antitrust counsel before collaborating with actual or potential competitors.
Summary of Guidelines
The Guidelines, issued in April 2000,5 recognized that “to compete in modern markets, competitors sometimes need to collaborate,” and that such collaborations “often are not only benign but procompetitive.”6 Courts have cited the Guidelines with favor, holding that many forms of competitor collaboration can be procompetitive and efficient.7 That caselaw is still relevant despite the agencies’ withdrawal of the Guidelines themselves.
The Guidelines set forth various guardrails for companies considering competitor collaborations. Specifically, they explained how the agencies would apply the antitrust laws in certain contexts. For example, competitor collaborations to jointly produce a product sold to others or used by the participants as an input are often procompetitive, but if they involve agreements on the level of output or the price at which the product will be sold, the agencies may view such collaborations as harming competition.8 Similarly, competitor collaborations involving agreements to jointly sell, distribute, or promote goods or services that are either jointly or individually produced may be procompetitive. However, marketing collaborations involving agreements on price, output, or other competitively significant factors may be viewed by the agencies as anticompetitive.9
Impact of Withdrawal
Withdrawal of the Guidelines does not change the fact that many forms of competitor collaboration are pro-competitive and do not raise antitrust concerns. However, competitor collaborations and the market circumstances in which they operate “vary widely,”10 thus caselaw and statutes alone are unlikely to provide adequate guidance for businesses to assess proposed collaborations.
As a practical matter, companies will need to have “antitrust lawyers on speed dial,” as Commissioner Holyoak stated in dissent.11 Any company considering collaborations with actual or potential competitors should consult with counsel that not only understands the antitrust laws, but also how the agencies have traditionally applied it in their enforcement actions so they can engage in such collaborations without raising imprudent antitrust risks.
Although we expect the new administration to reintroduce the guidelines for competitor collaborations (or issue new ones), it could take time to do so. In the meantime, companies may mitigate the antitrust risks of competitor collaborations by clearly documenting the pro-competitive bases for any collaborations, limiting the scope of information exchanges to general, non-competitively sensitive information unless first consulting with counsel, and not entering into agreements regarding pricing or output without first consulting with counsel.
[1] U.S. Dep’t of Justice & Fed. Trade Comm’n, Justice Department and Federal Trade Commission Withdraw Guidelines for Collaboration Among Competitors (Dec. 11, 2024), https://www.justice.gov/atr/media/1380001/dl?inline.
[2] Id.
[3] In February 2023, the DOJ withdrew three policy statements related to information sharing and competitor collaboration in the healthcare industry. See Wilson Sonsini Client Alert, “DOJ Withdraws Support for Healthcare Policy Statements and Increases Information Exchange Scrutiny” (Feb. 6, 2023), https://www.wsgr.com/en/insights/doj-withdraws-support-for-healthcare-policy-statements-and-increases-information-exchange-scrutiny.html.
[4] Dissenting Statement of Commissioner Melissa Holyoak Regarding Withdrawal of 2000 Antitrust Guidelines for Collaboration Among Competitors, No. V250000 (Dec. 11, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-collaboration-guidelines-withdrawal-statement.pdf.
[5] Fed. Trade Comm’n & U.S. Dep’t of Justice, Antitrust Guidelines for Collaborations Among Competitors (April 2000) (hereinafter Guidelines), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf.
[6] Id. at 1.
[7] See, e.g., Princo Corp. v. Int’l Trade Comm’n, 616 F.3d 1318, 1335 (Fed. Cir. 2010) (noting that collaboration among competitors can “reduce costs, facilitate innovation, eliminate duplication of efforts and assets, and share risks that no individual member would be willing to undertake alone”).
[8] Guidelines at 13.
[9] Id. at 14.
[10] Id. at 1.
[11] See supra n.4.
