United States: DOJ Withdraws "Safety Zones" for Information Exchanges

In brief

On February 3, 2023, the U.S. Department of Justice (“DOJ”) announced the withdrawal of three antitrust policy statements that allowed certain information exchanges between competitors in healthcare markets. The day before this announcement, Principal Deputy Assistant Attorney General Doha Mekki of DOJ Antitrust Division warned that DOJ would reconsider these outdated policy statements in light of recent changes in the healthcare industry.



In a speech on February 2, 2023, Principal Deputy Assistant Attorney General Doha Mekki said that DOJ would revisit or withdraw three sets of policy statements that were issued jointly by DOJ and the Federal Trade Commission (“FTC”) over the past three decades. Following Mekki’s remarks, on February 3, 2023, DOJ announced that it was withdrawing the three policy statements. The policy statements had recognized certain exchanges of competitively sensitive information among competitors in the healthcare industry that were unlikely to raise material antitrust concerns:

  • In 1993, DOJ and FTC issued Antitrust Enforcement Policy Statements Issued for Health Care Industry (“1993 Policy Statements”), which established a “safety zone” allowing physicians to provide purchasers of healthcare services with non-price information including underlying medical data. The 1993 Policy Statements recognized that the provision of this type of information has procompetitive benefits and allows physicians to work with healthcare purchasers to improve the quality of care that patients receive. The 1993 Policy Statements also established a safety zone covering hospital participation in surveys of service prices or personnel compensation. This safety zone applied where (1) the survey is managed by a third party, (2) the information collected for the survey is more than three months old, and (3) the information is based on data from at least five hospitals and aggregated so that the prices charged or compensation paid by particular hospitals cannot be identified.
  • In 1996, the agencies issued Statements of Antitrust Enforcement Policy in Health Care (“1996 Policy Statements”), which expanded the safety zones defined in the 1993 Policy Statements.
  • In 2011, the agencies issued Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, which addressed information exchanges in the provision of healthcare services to Medicare patients.

Mekki observed that the healthcare industry has evolved over the past thirty years and has become an “[i]ncreasingly . . . data intensive industry that relies on the power of machine learning, artificial intelligence, and other advanced tools to develop or deliver products or services.” In light of these developments, Mekki noted that these policy statements were “outdated” and may not reflect current market realities or the full scope of liability under the antitrust laws. Commenting on the withdrawal of the policy statements, Assistant Attorney General Jonathan Kanter of DOJ Antitrust Division also remarked: “The Antitrust Division will continue to work to ensure that its enforcement efforts reflect modern market realities.”

Mekki also expressed concern that the “safety zones” in the healthcare policy statements “do not consider the realities of a transformed industry” and “understate the antitrust risks of competitors sharing competitively-sensitive information.” Specifically, Mekki observed that (1) third-party intermediaries who facilitate information exchanges may still enhance anticompetitive effects; (2) data that are at least three months old may still be competitively sensitive given the rise of data aggregation, machine learning, and pricing algorithms that rely on historical data; and (3) information exchanges involving at least five participants may still harm competition.

Notably, Mekki’s concerns about exchanges involving intermediaries, historical data, and aggregated data from numerous participants were not limited to the healthcare context. Indeed, Mekki observed that in some industries, sophisticated algorithms can ingest historical, aggregated data to glean insights about the strategies of a competitor. “Where that happens,” she warned, “the distinctions between past and current or aggregated versus disaggregated data may be eroded.” This suggests that, despite similar guidance provided in policies such as DOJ and FTC’s Antitrust Guidance for Human Resource Professionals, the agencies may revisit or withdraw such policies beyond the healthcare context.

Mekki also announced that DOJ will closely scrutinize proposed mergers when the industry has a history of collusion or when a merging party has previously engaged in an anticompetitive information exchange. “Merging parties will face an uphill battle convincing us that post-merger coordination or collusion is unlikely,” Mekki warned.

Finally, Mekki affirmed DOJ’s commitment to enhancing its “whole-of-government” approach to competition issues, as mandated by President Joe Biden’s Executive Order on Promoting Competition in the American Economy. Mekki emphasized that DOJ and its enforcement partners are working together toward a common objective: “vibrant, free markets that are free of anticompetitive conduct and consolidation.”

Notwithstanding the withdrawal of the healthcare policy statements, to date, DOJ has not addressed whether this policy change will affect competitor collaborations involving how to structure joint ventures and group purchasing organizations. To this end, the current guidelines and business review letters regarding competitor collaborations still remain in effect. In addition, FTC has not publicly indicated whether they will follow suit and similarly withdraw from any or all of the three policy statements.

Key Takeaways

DOJ’s withdrawal of the policy statements signals that it is continuing to pursue vigorous antitrust enforcement and is intensifying scrutiny of information exchanges between competitors. Although the withdrawn policy statements were specific to the healthcare industry, this withdrawal signals potential further efforts to examine information exchanges beyond the healthcare context. For this reason, companies in all sectors should consider taking steps to mitigate antitrust liability. In particular:

  • Companies that participate in information exchanges compliant with the now-withdrawn guidance should take a fresh look at their antitrust risk profile.
  • Companies should implement antitrust compliance programs that include training on contacts with competitors, including which types of information exchanges may be anticompetitive.
  • Companies should develop internal policies and controls around communications with competitors.
  • Companies that have not conducted an annual antitrust risk assessment and compliance review should consider doing so as soon as possible.
  • Companies should be extra cautious when considering any information sharing and consult legal counsel.

We will continue to monitor developments in this area.

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