On February 2, 2023, Doha Mekki, Principal Deputy Attorney General (DAAG) for the U.S. Department of Justice (DOJ) Antitrust Division, announced the agency’s withdrawal of three enforcement policy statements related to information sharing and competitor collaboration in the healthcare industry.¹ In practice, however, the statements were relied upon and steered enforcement decisions in other industries as well.² Thus, the DOJ’s withdrawal of these policy statements signals that companies can no longer rely on the guidance documents to protect themselves from antitrust scrutiny when sharing competitively sensitive information. It is unclear if the DOJ will offer any new guidance on exchanges of competitively sensitive information. But in light of the withdrawal of guidance, clients should consider whether any existing or planned information exchanges may give rise to undue United States (U.S.) antitrust risk.

DAAG Mekki highlighted in her speech that the DOJ was withdrawing support for the “safety zones” that currently apply to mergers, joint ventures, joint purchasing agreements, and joint information exchanges. The two safety zones most often relied upon are the following:

1. The safety zone for joint purchasing agreements:
   • The purchases accounted for no more than 35 percent of the total purchases in the relevant market.
   • The cost of the purchases accounted for less than 20 percent of the participants’ revenues.
2. The safety zone for competitor information exchanges:
   • Exchanges were managed by a third party (such as a trade association).
   • Exchanges of information were more than three months old.
   • Exchanges where:
     • five or more firms contributed data;
     • no single firm's data constituted more than 25 percent of a statistic; and,
     • no single firm's data could be identified.

The U.S. antitrust agencies have historically assumed that information exchanges can be pro-competitive and pose fewer antitrust risks when the information is anonymized, aggregated, and backward-looking. But according to DAAG Mekki, the U.S. antitrust enforcers must reconsider this approach to information sharing because competitors today can use complex algorithms to reverse engineer rivals’ pricing and other competitive strategies, even if the data is historical. Moreover, in DAAG Mekki’s view, rapid technological change has enabled types of information sharing that the DOJ’s old guidance never envisioned. In other words, information exchanges that the agency once viewed as benign may now be scrutinized as facilitating price fixing, wage fixing, and other forms of illegal conduct.

DAAG Mekki also noted that the DOJ’s evaluation of information exchanges would not be limited to illegal agreements under Section 1 of the Sherman Act. Instead, she said that mergers between companies with a history of anticompetitive information sharing would face an “uphill battle” in clearing a deal.

With this news, clients would be wise to adjust their thinking on competitor collaborations and sharing competitively sensitive information with rivals or even third parties. While still early, the announcement signals a potential move to where the U.S. antitrust agencies will assess information exchanges similar to the EU, which more often deems such sharing as per se illegal. Some situations where seeking counsel may now be more warranted are:

• joint ventures,
• benchmarking initiatives,
• supply agreements,
• production, buying, marketing and R&D collaborations,
• trade association memberships,
• standard-setting organization membership, and
• industry conferences.

If you have any questions about information-sharing practices or related matters, please feel free to contact Beau Buffier, Michelle Hale, Brent Snyder, Mark Rosman, or another member of Wilson Sonsini’s antitrust and competition practice.

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[1] Department of Justice and FTC Antitrust Enforcement Policy Statements in the Health Care Area (Sept. 15, 1993) - https://www.justice.gov/archive/atr/public/press_releases/1993/211661.html; Statements of Antitrust Enforcement Policy in Health Care (Aug. 1, 1996) - https://www.justice.gov/atr/page/file/1197731/download; Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (Oct. 20, 2011) - https://www.justice.gov/sites/default/files/atr/legacy/2011/10/20/276458.pdf.

[2] Press Release, Justice Department Withdraws Outdated Enforcement Policy Statements (Feb. 3, 2023), available at https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements; Ben Ramaly, DOJ signals increased scrutiny of information sharing, Global Competition Review (Feb. 2, 2023), available at https://globalcompetitionreview.com/gcr-usa/article/doj-signals-increased-scrutiny-of-information-sharing; Dan Pascun, Information Sharing to Face Heightened DOJ Antitrust Scrutiny, Bloomberg (Feb 2. 2023), available at https://news.bloomberglaw.com/antitrust/information-sharing-practices-come-under-doj-antitrust-scrutiny.