U.S. Department of Justice rescinds longstanding policy governing information exchanges

In a press release,¹ DOJ called the three policy statements at issue² “outdated,” stating that the decision to withdraw was warranted in part because “[o]ver the past three decades” since two of the three Policy Statements were released, the “health care landscape has changed significantly.”  DOJ contends that the Policy Statements are “overly permissive” with respect to certain subjects such as information sharing, and that withdrawal is necessary to “serve[] the interest of transparency with respect to the Antitrust Division’s enforcement policy in health care markets.”

Withdrawal signals change in how DOJ will review information exchanges

One of the policy statements from which DOJ announced it has withdrawn, “Statements of Antitrust Enforcement Policy in Health Care,” outlined that a “reasonable” exchange of information among competitors would exist in a “safety zone,” meaning it is highly unlikely the exchange raises substantial concerns of illegality, if:

• the exchange is managed by a third-party, like a trade association;

• the information provided by participants is more than three months old; and

• at least five participants provide the data underlying each statistic shared, no single provider’s data contributes more than 25% of the “weight” of any statistic shared, and the shared statistics are sufficiently aggregated that no participant can discern the data  of any other participant.

In short, since the publication of this policy statement in 1996, DOJ generally considered information exchanges  legal so long as they were anonymized (by a third party), the information was historical, and the information was aggregated.  In withdrawing the policy statement governing information exchanges—and with no indication if or when the agency intends to replace it—there is currently no guidance from DOJ on what kind of information exchanges it would consider presumptively legal.   

In a speech on 3 February at an antitrust conference in Miami, Florida,³ Principal Deputy Assistant Attorney General Doha Mekki emphasized that even exchanges of aggregated data can be anticompetitive, and the risk is not mitigated by there being many competitors involved in the exchange.  As an example, Mekki pointed to the fact that DOJ has taken this approach in at least one recent consent decree,⁴ and is signaling the agency’s intent to apply this principle more broadly.  How broadly remains an open question: Mekki said that the agency has no current plans to replace its policy on information exchanges, just that it was withdrawing from the current Policy.  As a result, there is no guidance from DOJ on what kind of information exchanges would be considered presumptively legal. 

Implications for health care and beyond

While DOJ cannot unilaterally change the law as applied by the courts—and exchanges of aggregated data are not necessarily unlawful—the elimination of this safe harbor could meaningfully change the risk calculus for companies involved in the exchange of aggregated data.  In addition, it will result in increased uncertainty for industries as to how to structure information exchanges without raising risk.  The decision will affect all industries that utilize information-sharing exchanges, such as real estate, advertising, meatpacking, and transportation.

It is important to note that DOJ’s policy position cannot make unlawful compulsory disclosure of rate information, such as disclosures required under the transparency rules. 

It is also important to note that this is only a policy decision on the part of an agency.  DOJ does not write the law and it does not determine what is, or is not, legal.  That is left to the courts.  Ultimately, the body of case law on information exchanges is what controls and will be most relevant as antitrust practitioners continue to litigate matters involving these issues.  The Policy Statements, however, were often viewed as informational, if not influential, by judges, and DOJ’s affirmative withdrawal may be something that a judge considers in his or her analysis of the legality of information exchanges. 

The FTC and DOJ jointly issued the policy related to information exchanges in 1996 but it is not clear whether the FTC will also withdraw the guidance.  It is not unprecedented for the agencies to unilaterally withdraw from jointly issued guidance.  For example, in September 2021, the FTC voted to withdraw from the 2020 Vertical Merger Guidelines⁵ but DOJ kept the guidelines in place.

Looking Ahead

The withdrawal of this guidance is part of a broader sea change in antitrust enforcement in recent years.  Several additional relevant examples include:

• The FTC’s recently-announced proposed rule that would make the majority of employee non-compete agreements unlawful nationwide;

• DOJ’s abrupt withdrawal last year from the longstanding merger remedies manual;

• The FTC decision to rescind rescinding the vertical merger guidelines;

• The impending revisions to the agencies’ horizontal merger guidelines;

• Federal legislation that, among other things, increases scrutiny on big tech companies and, significantly, allows State Attorneys General to circumvent multi-district litigation venue limitations;⁶

• The DOJ and FTC’s increased merger enforcement and rejection of early termination and negotiated divestitures and settlements;

• The repeal of the McCarran-Ferguson Act, which provided certain antitrust immunity in the health insurance industry; and

• Continued criminal enforcement of labor wage-fixing and no-poach cases following the 2016 Antitrust Guidance for HR Professionals.

Next steps

These developments have create heightened risk across industries.  You should contact experienced antitrust counsel if you have any questions about how these changed policies, particularly the information exchange policies, may affect your business.

Authored by Justin Bernick and Liam Phibbs.

References

1 Department of Justice press release, “Justice Department Withdraws Outdated Enforcement Policy Statements” (3 February 2023) available here.

2 Department of Justice and Federal Trade Commission, “Antitrust Enforcement Policy Statements Issued for Health care Industry” (15 September 1993) available here; Department of Justice and Federal Trade Commission, “Statements of Antitrust Enforcement Policy in Health Care" (August 1996) available here; and Federal Trade Commission/Department of Justice, “Statement of Antitrust Enforcement policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (20 October 2011) available here.

3 GCR Live: Law Leaders Global 2023 (2-3 February 2023), Miami, Florida. 

4 Department of Justice press release, “Justice Department Files Lawsuit and Proposed Consent Decrees to End Long-Running Conspiracy to Suppress Worker Pay at Poultry Processing Plants and Address Deceptive Abuses Against Poultry Growers” (25 July 2022) available here.

5 Federal Trade Commission press release, “Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary” (15 September 2021) available here.

6 See Hogan Lovells, “House passes three antitrust reform bills and all eyes turn to the Senate,” (10 October 2022) available here.  On 3 January 2023 President Biden signed the bills into law as part of the Consolidated Appropriations Act, 2023, available here.