Antitrust and Competition and the Coronavirus Crisis

The Coronavirus crisis has created an unusual situation for the world, but also for antitrust and competition law. People around the globe are trying to cooperate to solve and move past the crisis, but cooperation among competitors is a touchy subject under antitrust and competition laws.

Of course, cooperation between or among competitors isn’t unheard of, even during non-crisis times. Joint ventures are prevalent and often celebrated, companies will often license their technology to each other, and the existence of certain professional sport leagues, for example, depend entirely upon cooperation among competing and separately owned teams. Indeed, the Department of Justice Antitrust Division and FTC have published guidance (in 2000) on collaborations among competitors.

Human beings everywhere are working together to defeat the Coronavirus and that will require cooperation, sometimes even among and between competitors. It is unlikely that antitrust and competition law will get in the way of that. Indeed, the Antitrust Division of the Department of Justice issued a Business Review Letter confirming that certain competitors can cooperate “to expedite and increase manufacturing, sourcing, and distribution of personal-protective equipment (PPE) and coronavirus-treatment-related medication.”

At the same time, the foundations of antitrust and competition law—the “faith in the value of competition,” as articulated by the US Supreme Court in National Society of Professional Engineers—is the motor that will accelerate us toward solutions.

Private enterprise and the incentives inherent within it have created the foundations and the machinery to “science” our way out of this crisis. Over-coordination through a central planner will detract from that because we would lose the feature of massive a/b testing, or really a/b/c/d/e/etc. testing, that comes from a bottom-up, decentralized approach to creating and distributing resources.

So—at least in my opinion—antitrust and competition law should maintain their role in supporting competition during this crisis (and the FTC agrees with me). But—as is already true of antitrust and competition law—when there is a strong pro-competitive reason for cooperation among competitors, the courts and antitrust agencies can adjust to let that conduct go forward (and they have here).

And once we are past this crisis, I suspect that antitrust and competition law will become an even more popular area of discussion because of the likely greater concentration of markets resulting from government intervention.

In the meantime, here are some articles that our antitrust team has written about antitrust, competition, and the Coronovirus Crisis:

• Can a Manufacturer Stop Price Gouging by Its Dealers During a Crisis? (Steven Cernak).

 

• COVID-19 Exposes Evil of Anticompetitive State Certificate of Need Laws (Aaron Gott and Jarod Bona).

 

• Both During and After COVID-19 Crisis, Antitrust Law Won’t Block Pro-Competitive Joint Ventures (Steven Cernak).

 

• How Will the Application of Antitrust Law Change During the Coronavirus Crisis? (Steven Cernak in Truth on the Market).

Also, Steven Cernak is heavily quoted in this article from MiBiz: Coronavirus price gouging spurs efforts to rein in ‘bad actor’ resellers.

Finally, we recommend that you read the blog series from our friends at Truth on the Market entitled “The Law, Economics, and Policy of the Covid-19 Pandemic.” Lots of outstanding work by very smart people.

The other part of this, of course, is the economy. With stay-at-home orders throughout the country, there is a lot less commerce happening.

 

Besides social distancing, washing hands, and staying home, we all have a duty to get the economy moving again. And competition plays an important role. While live sporting events and eating out at restaurants are not part of the near future, many individuals and businesses are figuring out ways to adjust their contribution to producing goods and services to the world that stays home.

That means restaurants delivering food, companies and teachers teaching through video-conferencing, and businesses all over the world, individually, figuring out how to create value for people, at least temporarily, living their lives very differently than they did only a month before. Competition supports innovation and that includes adjusting to changes in the world, no matter how quickly they happen.

If you have a business, find a way to add value to people at home and spend money on people and businesses that add value for you. And, as individuals, we should look for ways to contribute to commerce by spending money, if you have it, on goods and services that will help you get through this difficult time. By participating in commerce, you help others survive too.