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US DOJ Antitrust Division Withdraws Safety Zones
The United States Department of Justice Antitrust Division announced on February 3, 2023, that it has withdrawn from three guidance documents, issued in 1993, 1996 and 2011. The reason given was that the guidance documents were deemed โobsolete.โ
The most significant aspect of this announced withdrawal is that each document provided certain โsafety zonesโ for health care providers. Simply stated, if a company complied strictly with the requirements of the safety zone, one could rest assured that such conduct would not be challenged by the Antitrust Division. There were safety zones for, e.g., joint purchasing, small market hospital mergers, and provider networks that involved substantial sharing of financial risk.
The greatest immediate impact may be in the area of information exchanges. A widely utilized safety zone was Statement 6 of the 1996 โStatements of Antitrust Enforcement Policy in Health Careโ regarding the sharing of competitively sensitive information, e.g., wages and salaries. Over three decades, this safety zone in fact had become the standard methodology, not only in health care, but by businesses, generally.
The DOJ withdrew the safety zone over new developments in data analysis and machine learning, which the DOJ said could potentially be applied to aggregated data to harm competition in certain circumstances, even if the exchange satisfies the โsafety zoneโ criteria. It is too early to predict where the agencies are headed.[1] But some businesses may understandably be more reluctant to continue to participate in data gathering and data dissemination. Notwithstanding, our recommendation is not to reflexively abandon existing collaborative relationships without further analysis. We suggest that a first step would be to take stock of any existing activities in this area and if appropriate consult with counsel to determine whether they fall within the areas of concern expressed by the Antitrust Division.
[1] Although the FTC has not yet withdrawn its guidance endorsing these sorts of safety zones, given the FTCโs aggressive enforcement posture, it is widely assumed that the FTC will do so, too.
