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DOJ Antitrust Division Announces Withdrawal of Information Sharing Safety Zone
Friday, February 10, 2023

On February 2, 2023, Principal Deputy Assistant Attorney General Doha Mekki announced that the US Department of Justice (DOJ) Antitrust Division was revisiting and withdrawing several policy statements that provided a key safe harbor for certain types of information sharing.

formal press release from the DOJ followed on February 3.

This safe harbor has served as the framework for information exchanges and benchmarking in many industries, and the DOJ’s withdrawal of these policy statements is a significant action. Companies should take this opportunity to reassess their participation in information exchanges with their antitrust counsel.

Removal of Safety Zone

DOJ withdrew three policy statements providing guidance on information exchanges in the health care industry: Antitrust Enforcement Policy Statements in the Health Care Area (1993), Statements of Antitrust Enforcement Policy in Health Care (1996), and Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (2011). These statements provided a “safety zone” from antitrust enforcement for exchanges of information between health care providers that met three requirements:

  1. A third party, such as a trade association, managed the collection, aggregation, and dissemination of the information,

  2. The information was at least three months old, and

  3. At least five participants contributed data for any statistic, no individual participant’s data made up more than 25% of a statistic on a weighted basis, and any information disseminated is sufficiently aggregated such that it would not allow recipients to identify the prices charged or compensation paid by any particular provider.

While the specific policy statements addressed health care, the safety zone has been the foundation of information exchanges in a wide variety of industries.

In her speech announcing the withdrawal, Mekki expressed concerns that the safety zone no longer reflects the realities of the healthcare industry, which has become more consolidated over time, or the development of technological tools such as data aggregation, machine learning, and pricing algorithms that have increased the competitive value of historic information.

Impact on Information Sharing

The withdrawal of the policy statements forecasts greater DOJ scrutiny of information sharing; however, it is still clear that not all information sharing is illegal. Both the Supreme Court and the DOJ have recognized that, in many instances, competitors need to share information to achieve legitimate pro-competitive goals. However, exchanges of information could violate the Sherman Act, which prohibits a “contract, combination…or conspiracy” that unreasonably restrains trade, if they allow competing sellers to collude or tacitly coordinate in an anti-competitive manner, such as by coordinating prices. Generally, courts will balance these two competing concerns. The Supreme Court has protected information exchanges where the data was publicly available, was historic rather than current or forward-looking, and/or was aggregated to make the information anonymous.[1] It has also emphasized that certain exchanges of current price information and information exchanges in concentrated markets may receive greater scrutiny.[2]

The DOJ has not stated whether it plans to replace the policy guidance. In addition, when assessing information exchanges, it is important to remember that there has been a clear trend toward increased review of information sharing. For example, the DOJ recently fined three poultry producers $84.8 million over allegations that they improperly shared employee wage and benefit information. Companies should expect increased scrutiny in the future.

Takeaways

The withdrawal of the safety zone and increased scrutiny of information exchanges signal that broader enforcement against information sharing is coming. Companies should consult with their antitrust counsel to re-evaluate their current information-sharing practices.


FOOTNOTES

[1] See Maple Flooring Mfrs.’ Ass’n v. United States, 268 U.S. 563, 571 (1925).

[2] See United States v. Container Corp., 393 U.S. 333, 335­-38 (1969); United States v. U.S. Gypsum Co., 438 U.S. 422, 443 (1978).

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