On 14 September 2021, the US Department of Justice’s Antitrust Division (DOJ) and the US Federal Trade Commission (FTC) issued a Joint Statement (Statement) on antitrust enforcement regarding collaborative relief efforts after Hurricane Ida. The Statement recognizes that collaboration among companies ― even among competitors ― may be necessary and beneficial to assist communities with rebuilding and relief efforts. However, the Statement also makes clear that neither agency will tolerate attempts to subvert competition laws or engage in illegal conduct under the guise of disaster recovery. Both agencies will use their enforcement authority and tools to prosecute anticompetitive and fraudulent conduct taking advantage of hurricane victims or relief efforts. These tools include the DOJ’s Procurement Collusion Strike Force, which has trained 1,500 investigators and has several ongoing investigations.
The agencies recognize that collaborative agreements may be essential to help communities affected by the disaster and to expedite rebuilding efforts. The Statement cites the Antitrust Guidelines for Collaboration Among Competitors, which provide guidance on how businesses can collaborate without violating the antitrust laws. The Statement also provides examples and describes the various benefits of certain business collaborations to respond to disasters. The US agencies issued similar antitrust guidance in the wake of Hurricane Katrina and Rita, as well as guidance for Hurricanes Harvey and Irma in 2017. Likewise, the agencies issued similar guidance during the COVID-19 health crisis.1 Even so, the US antitrust laws are not being relaxed. The Statement makes clear the agencies intend to hold accountable companies and individuals who enter into anticompetitive agreements that exploit hurricane victims or hurricane relief efforts.
In More Detail
The statement recognizes that the rebuilding of communities affected by the storm requires cooperation among private businesses and federal, state and local governments. It also highlights numerous business sectors that have been affected by the disaster, including health care, housing, telecommunications, and retail. The agencies acknowledge that collaborative agreements can enable businesses to recover more quickly than working alone. The guidance provides examples of permissible collaborations, including agreements to combine health care services to meet the needs of the affected communities, or to more quickly bring vital supplies to those in need.
The Statement emphasizes that US antitrust laws are sufficiently flexible to allow for these types of competitor collaborations when they are applied with proper scope and length to respond to the disaster.
Companies must not use this flexibility as cover for anticompetitive conduct. As a member of the National Center for Disaster Fraud Task Force, DOJ commits to investigate and prosecute anticompetitive or fraudulent schemes that follow the disaster. Likewise, the FTC will investigate companies or individuals engaging in conduct violating consumer protection laws that target victims of natural disasters.
The key takeaway is that companies cannot use Hurricane Ida or other natural disasters as an excuse to break the US antitrust laws. The DOJ and FTC have made clear that they will pursue any businesses or individuals who engage in fraudulent conduct, attempt to undermine the competition laws, or disguise illegal conduct as disaster relief efforts.
The post United States: Agencies issue antitrust enforcement statement on post-hurricane relief efforts appeared first on Global Compliance News.