The Federal Trade Commission and the Justice Department’s Antitrust Division have jointly withdrawn the “Antitrust Guidelines for Collaborations Among Competitors,” with the majority calling them outdated.

The commission said in its withdrawal statement that the agencies are committed to “vigorous” antitrust enforcement on a case-by-case basis in competitor collaborations because “such collaborations can harm competition and subvert the competitive process.”

“[T]he Collaboration Guidelines rely, in part, on outdated and withdrawn policy statements, and risk creating safe harbors that have no basis in federal antitrust statutes,” the statement says. “They also rely on outdated analytical methods that fail to capture advances in computer science, business strategy, and economic disciplines that help enforcers assess — as a factual matter — the competitive implications of corporate collaborations.

“Furthermore, the Collaboration Guidelines fail to address the competitive implications of modern business combinations and rapidly changing technologies such as artificial intelligence, algorithmic pricing models, vertical integration, and roll-ups… Businesses considering collaborating with competitors are encouraged to review the relevant statutes and case law to assess whether a collaboration would violate the law,” the statement says.

The guidelines were issued in April 2000. The document states that it was “intended to explain how the agencies [FTC and DOJ] analyze certain antitrust issues raised by collaborations among competitors.”

“Competitor collaborations and the market circumstances in which they operate vary widely,” the document states. “No set of guidelines can provide specific answers to every antitrust question that might arise from a competitor collaboration. These guidelines describe an analytical framework to assist businesses in assessing the likelihood of an antitrust challenge to a collaboration with one or more competitors. They should enable businesses to evaluate proposed transactions with greater understanding of possible antitrust implications, thus encouraging procompetitive collaborations, deterring collaborations likely to harm competition and consumers, and facilitating the agencies’ investigations of collaborations.”

The vote to withdraw the guidelines was 3-2 with Commissioners Andrew Ferguson and Melissa Holyoak dissenting. Ferguson and Holyoak submitted dissenting statements and Commissioner Alvaro M. Bedoya submitted his statement in support of the change.

In his statement, Bedoya wrote that the withdrawal was necessary because the guidelines were out of date and “did not account for the significant evolution of Supreme Court and federal court guidance on these issues, relied on numerous outdated and withdrawn policy statements, and described safe harbors that have no basis in federal antitrust law.”

“In other words, the FTC was failing in its duties by leaving in place flawed and incomplete guidance that businesses could mistakenly rely upon,” Bedoya wrote. “Collaborations among competitors carry significant risks of anticompetitive conduct that can harm consumers and market conditions. I look forward to working with the new administration as they review the evolving jurisprudence on competitor collaborations and issue new guidance for the business community.”

Ferguson and Holyoak argued that now isn’t the time to make the change, right before a new president and administration takes office.

“The commission should from time to time revisit its nonbinding guidance to ensure that it properly informs the public of the commission’s enforcement position, promoting transparency and predictability,” Ferguson wrote. “But the time for the Biden-Harris Commission to conduct such guidance review is over. Last month, the American people elected a new president. Now is the time to facilitate an orderly transition, not to withdraw existing guidance or to push through revised or new guidance.”

Holyoak added in her statement that carrying out the withdrawal without providing replacement guidance “leaves businesses grasping in the dark.”

“As if that was not problematic enough, the majority is withdrawing the Collaboration Guidelines right after an administration-changing election, further compounding today’s poor policy decision,” she wrote “The majority had four years to address its concerns with the Collaboration Guidelines — now is not the time.”

Mark Cunningham, a New Orleans-based antitrust attorney and Jones Walker LLP partner, told Repairer Driven News the guidelines were due for an update but sided with Holyoak’s sentiment that replacement guidance should’ve been provided.

“The drivers behind this decision included a view among many at the enforcement agencies that the Collaboration Guidelines were unduly permissive and potentially inconsistent with their evolving theories of economic harm,” Cunningham said. “While the guidelines were due for an update, the dissenting statement of Commissioner Holyoak gets it right when she said that ‘without providing any replacement guidance or even intimating plans for future replacement, [the decision] leaves businesses grasping in the dark.'”

The FTC provides more information about free enterprise here.

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