FTC and DOJ Withdraw Longstanding Competitor Collaborations Guidance

There appears to be no recent case law development that explains the agencies’ move. Further, this retraction comes at the very end of the Biden Administration. As Commissioner Melissa Holyoak stated in a dissenting statement, “The Majority had four years to address its concerns with the Collaboration Guidelines—now is not the time.”

Companies may be particularly interested in the fate of the Guidelines’ 20% market share “antitrust safety zone” within which the agencies would not “challenge a competitor collaboration when the market shares of the collaboration and its participants collectively account for no more than [20] percent of each relevant market in which competition may be affected.” While the Safety Zone has been revoked, the case law and economic logic supporting that threshold remain valid. Importantly, none of the cases that the agencies cite in their withdrawal statement involve the condemnation of a collaboration between competitors with less than 20% market share.

Looking forward, it is unlikely that the FTC and DOJ will make significant changes to enforcement in the final month of the Biden Administration. However, the incoming FTC Chair and Antitrust Division head will decide whether to reinstate the old Collaboration Guidelines or replace them with updated guidance. Dissenting FTC Commissioners Ferguson (the soon-to-be Trump FTC Chair) and Holyoak argued that the timing of the withdrawal was improper and criticized the lack of new guidance. Thus, it seems likely that the new Trump Administration will take this opportunity to update the Collaboration Guidelines rather than simply reissue them. What form that update takes and when, may take time to develop.

The V&E team is continuing to monitor these developments and provide counseling to clients on well recognized do’s and don’ts of competitor collaborations.

¹ See, e.g., Board of Trade of the City of Chicago v. United States, 246 U.S. 231, 238 (1918); National Soc’y of Prof’l. Eng’rs v. United States, 435 U.S. 679 (1978); Continental TV, Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977); FTC v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411, 432-36 (1990); FTC v. Indiana Fed’n of Dentists, 476 U.S. 447 (1986).