January 17, 2025
Antitrust: FTC Withdraws Competitor Collaboration Guidelines
Last month, the FTC and DOJ announced that they were withdrawing their Antitrust Guidelines for Collaborations Among Competitors. In announcing the reasons for their decision, the agencies said that the Guidelines, which were issued in 2000, did not reflect case law developments under the Sherman Act, relied upon withdrawn and outdated policy statements, and risked creating safe harbors with no basis in the antitrust statutes.
Whatever their reasons, this excerpt from a Winston & Strawn blog points out that the antitrust regulators’ decision to again rescind long-standing guidelines has increased the risk associated with joint ventures and other collaborations between competitors:
With this dismantling of yet another long-accepted safe harbor, businesses that are considering engaging in collaborations with competitors are simply “encouraged to review the relevant statutes and case law to assess whether a collaboration would violate the law.” It continues to be prudent for businesses—particularly those in industries that often involve collaborative efforts between competitors and sectors that are prime targets of antitrust enforcement and scrutiny (e.g., health care, technology)—to engage early and often with counsel who are antitrust specialists and can help navigate the murky waters of statutory and case law precedent and can advise businesses on how to steer clear of compliance violations and regulatory risk.
Companies should also consider working with experienced counsel to engage with the DOJ and/or FTC preemptively through the agencies’ business review processes, whereby companies can receive specific guidance on whether a particular collaboration among competitors would violate antitrust laws according to that agency.
The FTC’s decision to withdraw the Guidelines was approved by a 3-2 vote along partisan lines, and prompted sharp dissents from the two Republican commissioners, Melissa Holyoak and Andrew Ferguson, and given the upcoming change in administrations, it seems likely that new guidelines will eventually be issued. Until that happens, this Wilson Sonsini memo has some advice for companies looking to establish joint venture or other collaborations with competitors:
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.
– John Jenkins