From Manila Envelopes to Algorithms: The Department of Justice Revisits Antitrust Information Sharing Guidance

On February 2, 2023, Principal Deputy Assistant Attorney General Doha Mekki claimed that the U.S. Department of Justice’s (“DOJ”) prior approach to analyzing information sharing between competitors failed to reckon with modern market realities.¹ The next day, the DOJ formally withdrew three policy statements — from 1993, 1996, and 2011 — that had created information sharing “safety zones” in the health care industry.² Although these guidelines were issued in the context of health care, over time their principles have come to guide practitioners regarding information exchanges across industries. It is unclear whether DOJ’s recent actions indicate that it is taking a greater interest in information sharing beyond the health care sector.³

Information Sharing in the Healthcare Industry and Beyond

In her speech, Mekki highlighted DOJ’s concerns with some of its current information sharing guidance in the health care sector. She claimed that increased consolidation and the use of “machine learning, artificial intelligence, and other advanced tools” have changed the economics of the industry — particularly as it relates to information sharing. Because DOJ’s policy statements were written when information was shared “in manila envelopes and through fax machines,” Mekki argued that they were ill-fit to address the nuances of modern health care markets. Accordingly, she explained that the DOJ’s safety zones had run their course.

The safety zones had outlined circumstances in which healthcare organizations could permissibly share certain sensitive information.  Previously, the policy statements largely protected the use of third-party intermediaries to facilitate information exchanges where the data shared was anonymized and at least three months old. But because historical data might possibly be used to create forward-looking pricing models, Mekki claimed that sharing such data may present similar risks to sharing current pricing information. Accordingly, when assessing the possible harms of information sharing, Mekki indicated that DOJ may now look outside the “traditional guideposts concerning market structure and the nature of the data exchanged.”

A Wider View on Enforcement

Mekki also explained antitrust enforcers’ “whole-of-government approach” to suspected anticompetitive information sharing. For example, agencies other than the Federal Trade Commission and DOJ — such as the Department of Transportation — may increase their enforcement efforts. She further emphasized that the Sherman Act is just one of many enforcement tools at the government’s disposal and that merging companies with a history of anticompetitive information sharing would likely face an uphill battle in passing merger review under the Clayton Act.

Despite not mentioning it explicitly, this government-wide approach reflects a continuation of enforcers’ focus on the health care industry. Mekki’s speech comes fewer than two months after the DOJ’s Antitrust Division signed a memorandum of understanding (“MOU”) with the Office of the Inspector General (OIG) of the Department of Health and Human Services (“HHS”).⁴ The MOU memorializes increased cooperation between HHS and DOJ and aims to protect competition and consumers in healthcare markets.⁵

The Current Landscape

Beyond looking at who shares information and what that information is, Mekki’s speech indicates that enforcers may be more interested in how the information is used, particularly within the health care sector. To be sure, courts will continue to evaluate the industry concentration and type of information at issue — exactly the sort of analysis on which the “safety zones” were based.⁶ And, as enforcers attempt to shape the law, they will continue to analyze these factors, even if they view them as ultimately insufficient to address modern markets. Accordingly, Mekki’s speech indicates that companies should consider a few factors when evaluating an information exchange: (1) the collective market share of those involved in the exchange, (2) the purpose of the information exchange, (3) the type of information that is exchanged, and (4) how the information that is exchanged is actually used.

In sum, while DOJ has now taken concrete action by withdrawing the health care policy statements, it is far from clear how it will address other sectors and whether its efforts will be successful. Enforcers have long recognized information sharing as pro-competitive in certain circumstances.⁷ It is not clear that one speech and the subsequent withdrawal of policy statements governing one industry represents a full-scale reevaluation of antitrust enforcers’ approach to information sharing. And, to the extent that they do, how the courts will greet such a “reevaluation” remains to be seen, especially given that the prior statements were already well grounded in existing case law around the rule of reason.

¹ Press Release, Dep’t of Just., Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division Delivers Remarks at GCR Live: Law Leaders Global 2023 (Feb. 2, 2023), https://www.justice.gov/opa/speech/principal-deputy-assistant-attorney-general-doha-mekki-antitrust-division-delivers-0#_ftn4.

² Press Release, Dep’t of Just., Justice Department Withdraws Outdated Enforcement Policy Statements: The Withdrawal Best Serves the Interests of Healthcare Competition (Feb. 3, 2023), https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements.

³ Within the health care industry, the statements applied with varying degrees of particularity. For example, the 2011 statement specifically governed Accountable Care Organizations that participated in the Medicare Shared Savings Program. The prior two statements from the 1990s, on the other hand, applied more broadly.

⁴ Press Release, Dep’t of Just., Justice Department’s Antitrust Division and the Office of the Inspector General of the Department of Health and Human Services Announce Partnership to Protect Health Care Markets (Dec. 9, 2022), https://www.justice.gov/opa/pr/justice-department-s-antitrust-division-and-office-inspector-general-department-health-and. 

⁵ Mem. of Understanding Between the Antitrust Division of the U.S. Department of Justice and the Office of the Inspector General of the U.S. Department of Health and Human Services (Dec. 9, 2022), https://www.justice.gov/opa/press-release/file/1556856/download.

⁶ See United States v. U.S. Gypsum Co., 438 U.S. 422, 441 n.16 (1978).

⁷ See, e.g., J. Thomas Rosch, Comm’r, Fed. Trade Comm’n, Antitrust Issues Related to Benchmarking and Other Information Exchanges, Prepared Remarks to ABA Section of Antitrust Law and ABA Center for Continuing Legal Education at 15 (May 3, 2011) (“Benchmarking has obvious procompetitive potential.”).