September 28, 2023


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DOJ Indicators Heightened Scrutiny on Info Exchanges and Competitor Collaborations

5 min read


On February 3, 2023, the US Division of Justice’s (DOJ) Antitrust Division announced the withdrawal of three coverage statements associated to antitrust enforcement in healthcare. Though the withdrawn statements concentrate on healthcare, DOJ’s determination to withdraw these statements can have broad impacts throughout industries.

The three coverage statements, issued in 19931996, and 2011, relate to competitor collaboration and knowledge sharing, and established “security zones” of actions shielded from antitrust scrutiny. The 1996 Statements of Antitrust Enforcement in Well being Care (1996 Statements) have been revised and expanded upon the 1993 Statements. Although ostensibly associated to healthcare, the steering has been relied upon by all industries and understood to cowl all method of competitively delicate data. Two of the protection zones most frequently relied on by corporations relate to competitor exchanges of value and price data, and competitor joint buying preparations.

Info Exchanges

The protection zone on data exchanges (Assertion 6 of the 1996 Statements) acknowledged that, normally, the companies wouldn’t problem an change of value or price data (e.g., worker compensation) if the next three situations have been met:

  1. The change is managed by a 3rd occasion (e.g., a commerce affiliation or advisor).
  2. The knowledge is greater than three months previous.
  3. The change has 5 or extra individuals contributing knowledge, and no particular person participant’s knowledge represents greater than 25% of any statistic; and no particular person participant’s knowledge could be recognized.

Firms have relied on this security zone in conducting surveys and benchmarking associated to pricing, provide prices, and salaries. These surveys have served as important compliance instruments. Organizations exempt from federal revenue tax typically use surveys to exhibit truthful market worth compensation to safeguard in opposition to claims of personal inurement and personal profit. Equally, healthcare corporations routinely use benchmarking research to exhibit truthful market worth compensation for compliance with fraud and abuse legal guidelines.

Group Buying Organizations

The protection zone on joint buying preparations (Assertion 7 of the 1996 Statements) acknowledged that, normally, the companies wouldn’t problem joint buying preparations (e.g., group buying organizations (GPOs)) if the next two situations have been met:

  1. The purchases account for lower than 35% of the entire gross sales of the bought services or products.
  2. The price of the services or products bought collectively accounts for lower than 20% of the individuals’ revenues.

DOJ cited modifications within the healthcare panorama because the rationale for withdrawing these coverage statements, particularly indicating that the statements have been “overly permissive” on data sharing. In a speech the day earlier than DOJ’s announcement, Principal Deputy Assistant Lawyer Normal (DAAG) Doha Mekki acknowledged that the protection zone components “don’t contemplate the realities of a reworked business” and “understate the antitrust dangers of opponents sharing competitively delicate data.” DAAG Mekki defined that:

  • Info exchanges managed by third events can have the identical anticompetitive results—and the usage of a 3rd occasion enhances anticompetitive results.
  • New algorithms and AI studying enhance the aggressive worth of historic data (greater than three months previous) for sure services and products.
  • 5 or extra individuals don’t assure that such an data change won’t hurt competitors, particularly when the individuals exchanging the data collectively have a big share within the related market.

Thus, in keeping with DAAG Mekki, “sustaining the protection zones can be like creating specs for audio cassette tapes and making use of them to digital streaming.” DOJ is anxious that technological advances might enable corporations and third-party entities better capabilities to reverse engineer sure varieties of data in ways in which facilitate coordination (e.g., utilizing AI studying or complicated algorithms to foretell particular person individuals’ future conduct primarily based on historic knowledge, or disaggregate or unblind a person participant’s knowledge).


Statements 8 and 9 of the 1996 Statements addressed doctor community joint ventures and multiprovider networks, generally often known as impartial follow associations (IPAs) and clinically built-in networks (CINs). These statements set forth broadly adopted ideas of considerable monetary danger sharing and scientific integration applications that, the place ample, served as a foundation for competing suppliers to collectively contract with payors beneath the extra favorable rule of cause customary of evaluate. The 2011 Assertion of Antitrust Enforcement Coverage Relating to Accountable Care Organizations Taking part within the Medicare Shared Financial savings Program (2011 ACO Assertion) offered that accountable care organizations (ACOs) taking part within the Medicare Shared Financial savings Program (MSSP) can be afforded rule of cause remedy if, within the business market, the ACO used the identical governance and management construction and scientific and administrative processes as for MSSP participation. This was a big profit to hybrid ACOs/CINs, because it eradicated the danger of economic actions being handled as a per se illegal price-fixing or market allocation agreements amongst opponents. Because of this, many well being programs and doctor teams relied on the 2011 ACO Assertion. This assurance now not exists.


The coverage statements and the protection zones by no means had the power of regulation, however their withdrawal results in better uncertainty for corporations concerned in data exchanges and different competitor collaborations. Firms routinely depend on third-party research of historic knowledge from a number of market individuals to guage the best way to value their services and products and guarantee they’re setting aggressive costs, paying aggressive costs for inputs and provides, and providing aggressive compensation and advantages to their workers. The withdrawal of the statements removes clear steering on how to do that lawfully. Firms can be smart to evaluate their present data exchanges, with an emphasis on guaranteeing that participation in data exchanges doesn’t facilitate coordination as a result of the data being exchanged could be disaggregated or unblinded to determine particular individuals’ knowledge. The companies are more and more targeted on competitors points associated to worker compensation and hiring (see the Federal Commerce Fee’s (FTC) proposed rule banning noncompete agreements, mentioned right here).

Regardless of DOJ’s motion, corporations can nonetheless change data—even with opponents. DOJ, nonetheless, is in search of to insert uncertainty round what sorts of exchanges are at all times cheap. Our view is that going ahead corporations ought to observe the FTC’s 2014 recommendation shared in a weblog submit that suggested: “let cause be your information.” That weblog cited the FTC and DOJ’s 2000 Antitrust Pointers for Collaborations Amongst Rivals—which haven’t been withdrawn—which defined that reasonableness “relies on the character of data” shared:

  • The sharing of data on value, output, prices, or strategic plans is extra prone to elevate aggressive issues than the sharing of much less delicate data.
  • The sharing of data on present and future plans is extra prone to elevate aggressive issues than the sharing of historic data.
  • The sharing of particular person firm knowledge is extra prone to elevate concern than the sharing of aggregated knowledge that does determine particular person corporations.

In our view, the trail ahead is to make use of the withdrawn “security zones” as a place to begin for assessing whether or not the information-sharing protocols are cheap in mild of potential authorities issues. Firms, due to this fact, with the help of antitrust counsel, ought to take time to reassess their information-sharing protocols to contemplate the reasonableness of these protocols contemplating the character of the data shared and the enterprise goal of that association. Heightened focus ought to be given to the usage of data shared or obtained and the way it would possibly influence pricing or compensation choices.

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