Preventing and Minimizing Antitrust Problems

• Date: 01 February 2010

CHAPTER

VI

PREVENTING

AND

MINIMIZING

ANTITRUST

PROBLEMS

The

Federal

Trade

Commission

(FTC)

and

Antitrust

Division,

as

well

as

most

state

attorneys

general,

have

powerful

pre-complaint

investigatory

tools,

including

voluntary

requests

for

information,

subpoena

power

(civil,

and

in

the

case

of

the

Antitrust

Division

and

some

state

attommeys

general,

criminal), and

civil

investigative

demands,

by

which

they

can

request

or

mandate

document

production

and

depositions.

Regardless

of

whether

an

investigation

results

in

an

agency’s

filing an

enforcement

action,

even

compliance

with

a

voluntary

request

for

information

can

be

quite

expensive

in

terms

of

both

direct

cost

and

employee

time.

Compliance

with

compulsory

process

can

increase

these

costs

exponentially

as

can

defending

an

enforcement

action.

And

civil

actions

by

private

parties

raise

the

specter

of

treble-damage

liability

and

payment

of

the

plaintiff's

attorneys

fees.

Health

care

and

other

businesses

can

minimize

their

antitrust

risk

significantly

in

several

ways,

including

seeking

agency

opinions

as

to

whether

the

agency

would

challenge

particular

proposed

conduct,

developing

and

implementing

an

antitrust

compliance

policy

to

sensitize

employees

to

potential

antitrust

problems,

and

properly

managing

the

firm’s

business

records.

A.

Antitrust

Enforcement

Agency

Advisory

Opinions

The

Antitrust

Division

and

FTC

have

formal

processes

by

which

private

parties,

after

disclosing

a

proposed

course

of

action and

all

relevant

facts,

can

obtain

a

letter

in

which

the

agency

states

whether

it

would

challenge

the

conduct.

The

Antitrust

Division

issues

Business

Review

Letters,’

and

the

FTC

issues

both

staff

and

full-Commission

advisory

opinions.

Some

states

have

similar

processes.>

The

vast

—

See

28

C.F.R.

§

50.6,

2.

See

16

C.F.R.

§

1.1.

For

discussions,

see

Jeffrey

W.

Brennan,

Assistant

Director,

Bureau

of

Competition,

FTC,

Prospective

Guidance:

FTC

Advisory

Opinions,

Slides

Presented

Before

the

FTC

and

Department

of

Justice

Hearings

on

Health

Care

and

Competition

Law

&

Policy

279

280

Antitrust

Health Care

Handbook

majority

of

FTC

advisory

opinions

are

staff

advisory

opinions,

but

the

full

Commission

will

issue

an

advisory

opinion

when

the

request

involves

a

substantial

or

novel

question

and

there

is

no

clear

Commission

or

court

precedent

or

the

matter

is

of

significant

public

interest.

The

agencies’

advisory

opinions,

although

strictly

applicable

only

to

parties

requesting

them,

are

valuable

research

tools

in

analyzing

conduct

in

the

health

care

sector.

For those

obtaining

an

advisory

opinion,

it

can

provide

some

degree

of

comfort

and

protection.

Both

agencies

have

issued

a

plethora

of

advisory

opinions

relating

to

conduct

in

the

health

care

sector.*

Both

agencies

issue

advisory

opinions

only

as

to

proposed

conduct,

not

conduct

the

party

has

already

implemented.

And

the

issuance

of

a

favorable

opinion—that

the

agency

does

not

intend

to

challenge

the

conduct—provides

the

party

with

no

antitrust

exemption

or

defense,

even

from

an

action

by

the

agency

issuing

the

opinion.

The

Antitrust

Division,

for

example,

explains

that

it

remains

free

to

file

whatever

action

it

believes

is

in

the

public

interest,

although

it

notes

that

it

has

never

brought

a

criminal

prosecution

where

the

party

obtaining

its

business

review

letter

disclosed

all

relevant

facts

in

its

request.

Although

the

FTC

retains

the

right

to

rescind

its

advisory

opinion,

it

explains

that,

in

the

case

of

a

full-Commission

advisory

opinion,

it

will

not

file

an

(June

26,

2002),

hittp:/Avww.fitc.gov/ogc/healthcarehearings/docs/03062

6brennan.pdf;

Judith

A.

Moreland,

Staff

Attorney,

Bureau

of

Competition,

FTC,

Overview

of

the

Advisory

Opinion

Process

at

the

Federal

Trade

Commission,

Outline

Presented

Before

the

National

Health

Lawyers

Association

Antitrust

in

the

Health

Care

Field

Seminar

(Feb.

13,

1997),

http://www.

ftc.gov/bc/healthcare/industryguide/speech2.htm.

3.

See

generally

Ellen

S.

Cooper,

Prospective

Guidance

by

State

Attorneys

General

on

Antitrust

Issues

in

Health

Care,

ABA

SECTION

OF

ANTITRUST

LAW

ANTITRUST

HEALTH

CARE

CHRONICLE,

Winter

2004,

at 2.

4,

As

to

FTC

health

care

advisory

opinions,

see

Markus

H.

Meier

et al.,

Topic

and

Yearly

Indices

of

Health

Care

Antitrust

Advisory

Opinions

by

Commission

and

Staff

(Sept.

2009),

available

at

http:/Avww.fitc.gov/be/

adops/indexfin0909

pdf.

FTC

health

care

advisory opinions from

1982

to

the

present

are

on

the

FTC’s

Web

site

at

http:/Awww.ftc.gov/be/

healthcare/industryguide/advisory.htm.

Antitrust

Division

business

review

letters

from

1992

to

the

present

are

on

the

Division’s

Web

site

at

http://www.usdoj.gov/atr/public/busreview/

index.htm.

Health

care

advisory opinions

issued

before

these

dates

are

reprinted

at

3

&

4

JOHN

J.

MILES,

HEALTH

CARE

&

ANTITRUST

LAW

Apps.

C

&

D

(Supp.

2008)

[hereinafter

HCAL].